Posts with tag: house price confidence

Property price confidence rises in June

Published On: July 24, 2017 at 9:42 am


Categories: Property News

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The most recent House Price Sentiment Index (HPSI) from Knight Frank and IHS Markit shows that house price confidence in the UK rose during June.

Confidence in the market is measured by home many households believe that the value of their home rose over the previous month.


According to the research, a score of 50 equates to no change, with readings above this number showing increases and below indicating falls. Of course, the higher the figure, the greater the increase.

17% of the 1,500 households surveyed across Britain said that the value of their home has actually increased during the last month, in comparison to 8.9% who experienced falls. This has resulted in a house price sentiment index reading of 54.1.

This represented the twelfth straight month of positive growth for the Index, following the post-Brexit low recorded in July 2016. In addition, it shows the reversal of three months of falling sentiment.

Despite this however, the Index is still below the previous peak of 63.2, seen in May 2014.

Regional Sentiment

Of the 11 regions covered by the Index, 10 perceived that the value of their property increased in the last month. The North West was the only exception.

The largest rise over the course of June was seen in London and the East of England, with a reading of 57.7. Next come the South East (56.9) and South West (55.1).

In addition, the future HPSI, which looks at what households feel will happen to the value of their home in the next year, also increased, from 61.3 to 62.

Again, there was regional variation. Households in London were most confident about future price increases (68.7), followed by the South East (67.2) and West Midlands (64.8).

Property price confidence rises in June

Property price confidence rises in June

By tenure, mortgage borrowers were most confident that prices would rise, followed by renters and property owners.

Since its inception, the Index has been a good indicator for house price trends. This seems to confirm the advantage of an opinion-based survey, as opposed to historic transactions or mortgage market evidence.


Oliver Knight, an Associate in Knight Frank’s Residential Research, observed: ‘While UK house price sentiment ticked up slightly in July it remains subdued in comparison to longer term trends. Households still report that values are increasing, but at a more modest pace than before the EU Referendum, which remains consistent with wider housing market indicators.’[1]

‘Rising sentiment in July suggests that any uncertainty surrounding the recent General Election result, and the start of Brexit negotiations in June which could have weighed on pricing, has been offset by a lack of supply of housing for sale and the low interest rate, low mortgage rate environment which continues to underpin pricing across much of the UK,’ he added.[1]

Tim Moore, Senior Economist at IHS Markit, also said: ‘UK households continue to anticipate property price gains over the coming 12 months, especially those living in London and the South East. The latest survey signals a rebound in confidence for the first time in three months, but looking at the overall picture reveals that house price sentiment has shifted down a gear this summer.’

‘Household expectations for property price rises have eased to levels last seen in mid-2013, against a backdrop of weak pay growth, affordability constraints and squeezed consumer budgets. There are also signs that Brexit-related uncertainty and the fiscal squeeze on buy-to-let continue to weigh on sentiment.’

‘While households are expecting the soft patch to persist in the near-term, overall levels of confidence are slightly above the trend seen since the survey began in 2009. The resilient picture relative to longer-term patterns is likely helped by the ultra-low mortgage rate environment, improved credit availability and an entrenched shortage of supply across large parts of the country.’[1]



Property prices set to increase despite scepticism

Published On: July 26, 2016 at 9:52 am


Categories: Property News

Tags: ,,,

Despite the Brexit vote affecting sentiment in the housing market, many households are expecting property prices to rise, albeit at a steady pace.

The latest House Price Sentiment Index (HPSI) from Knight Frank and IHS Markit indicates that households across the UK feel the value of their home dropped during July. Respondents in nine of the eleven regions covered by the Index put this solely down to the decision to leave the European Union.

Positive future?

This said, the future HPSI is positive, with the majority of households suggesting that the value of their home will increase over the next 12 months. However, this rise is forecasted to be at its most modest since October 2012.

‘The impact of uncertainty in the wake of the Brexit vote is clear from the HPSI index reading for July, especially in light of the relative strength of sentiment in the run-up to the vote. Although there has been a marked drop in the index, the readings are hovering around the no-change mark, similar to levels in 2012/2013,’ noted Grainne Gilmore, head of UK residential research at Knight Frank.[1]

Regional variations

Results from the Index show that households in the South of England are more confident about property price rises than those in the North, Scotland or Wales.

Alongside geographical discrepancies, there are differences in positivity throughout various age groups. Those over 55 expect the value of their home to fall in the next year, similar to those aged 18-24. However, other age groups expect a moderate rise.

Tim Moore, senior economist at HIS Markit, said, ‘the surge in economic uncertainty after the EU referendum weighed heavily on UK house price sentiment during July. The current prices index signalled the greatest month to month loss of momentum for at least seven-and-a-half-years. Despite a sizeable fall since June, the latest reading signalled that house price sentiment was at a level seen in early 2013 and only marginally downbeat overall.’[1]

‘Households across all UK regions also indicated a sharp recalibration of their property price expectations for the next 12 months, led by those living in London and the South East,’ he continued.

Property prices set to increase despite scepticism

Property prices set to increase despite scepticism

Referendum reductions

Before the referendum, 43% of UK households expected a yearly rise in property values, as opposed to 8% that predicted a fall. Now, there is a fairly even split, with 26% predicting a rise in values and 23% anticipating a fall.

Concluding, Mr Moore said, ‘While it is too early to evaluate the full impact of the EU referendum on the UK property market, it is already clear that heightened uncertainty has cast a shadow over household sentiment. At the same time, fundamental imbalances between housing supply and demand have not changed materially, while lending conditions remain supportive. Nonetheless, a sharp jolt to consumer confidence in July has impacted swiftly on UK households’ perception of their property value, and this is also a signal that price expectations could remain highly sensitive to economic and political developments over the months ahead.’[1]