For the sixth consecutive month households have stated they believe the value of their homes have risen according to the House Price Sentiment Index (HPSI) from Knight Frank and Markit.
Over 21% of households surveyed in the UK during September said that the value of their home had risen over the last month whilst 5.7% stated that it had fallen.
Gráinne Gilmore, head of UK residential research at Knight Frank, said: “The HPSI reflects the rising confidence in the housing market which has emerged during the summer months.
“While the headline future index has reached a three-and-a-half year high, the regional picture remains mixed, with London and the South East leading from the front.
“This reflects how the market is receiving the biggest boost where there is most demand for housing. This demand is not only underpinned by the strong economic base in London and the South East, but also by the fact that there is more housing equity in these regions, which in many cases may be filtering through to the sales market via the Bank of Mum and Dad.
“The housing picture is brightening across the rest of the regions too, albeit at a slightly slower pace. The UK market has certainly been boosted by low bank rates, Funding for Lending, which has helped drive down mortgage rates, and Help to Buy. The rising levels of activity in the market are feeding back into confidence levels among households. More positive economic news will strengthen this trend.”
Although households in all regions perceived that the value of their home increased, the rate of the increases varied with households in the North East, who had reported in August that the value of their home had fallen, they are now reporting only modest rises (53.9). In contrast, households in London (67.0) and the South East (61.0) reported the biggest increases. (Any figure over 50 indicates that prices are rising and the higher the figure, the stronger the increase with any figure under 50 indicating that prices are falling).
The values of properties are expected to rise over the next 12 months in all regions, however there are noticeable differences between regions in the North and South with those in London (80.1) and the South East (71.4) expecting the biggest rise, whilst households in Wales (64.3) and the North East (64.4) anticipate modest increase in values.
Mortgage borrowers are the most confident that prices will rise over the next year (75.8), followed by those who own their home outright (74.6). Those who are renting are the more downbeat about the future movement in house prices (55.6).
Chris Williamson, chief economist at Markit, said: “ UK house prices look set to continue rising in the coming months. Official data already shows average UK house prices are close to their pre-crisis peak, and households’ optimism about prices over the coming year surged higher in September.
“Some 47% of people expect prices to rise over the coming year compared to just 8% anticipating a decline, which is the most positive overall picture we’ve seen since we started collecting data back in 2009.
“While London and the South East remain the most buoyant in terms of house price sentiment, expectations of house price growth over the coming year picked up in all other regions in September, jumping to the greatest extents in the North East and North West.”
