UK Home Sellers Confident

Knight Frank recently reported that 21% of 1,500 households surveyed in the United Kingdom (UK) saw an increase in their home values and that many more expect values …

Knight Frank recently reported that 21% of 1,500 households surveyed in the United Kingdom (UK) saw an increase in their home values and that many more expect values to increase in the near term. The firm’s House Price Sentiment Index saw an increase 55.3 to 57, with any score over 50 indicating increasing real estate value. Those surveyed represented a wide range of age groups and income levels, with the majority in all categories feeling bullish about the value of their homes. Experts believe it’s a sign of renewed vitality in the UK real estate market. For more on this continue reading the following article from Property Wire.

Households across the UK are expecting the value of their home to rise over the next year, at the fastest rate since early 2010.

The latest Knight Frank/Markit House Price Sentiment Index shows that more than 21% of the 1,500 households surveyed across the UK said that the value of their home had risen over the last month, while 5.7% said the value had fallen.

This results in a HPSI reading of 57, up from August’s reading of 55.3, and marks the highest reading since the index began in early 2009. Any figure over 50 indicates that prices are rising. The higher the figure, the stronger the increase. Any figure under 50 indicates that prices are falling.

On the smoother three month rolling average, the reading has risen to 56.7 in the three months to September, up from 52 in the previous quarter.

The future HPSI, which measures what households think will happen to the value of their property over the next year, rose again in September to a its highest since January 2010, reversing the slight dip seen in August. On the three month average basis, the future HPSI reading was 68.2, the highest level since the index began, up from 63.1 in the previous three month period.

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While households in every region perceived that the value of their home had increased, the rate of the increases varied. Households in the North East, who in August reported that the value of their home had fallen, are now reporting only modest rises at 53.9. In contrast, households in London at 67 and the South East at 61 reported the biggest increases.

Respondents in all regions expect the value of their property to rise over the next 12 months, but there are significant differences between many regions in the North and South. Those in London at 80.1 and the South East at 71.4 expect the biggest rise in prices, while households in Wales at 64.3 and the North East at 64.4 anticipate the most modest increase in values.

Mortgage borrowers are the most confident that prices will rise over the next year at 75.8, followed by those who own their home outright at 74.6. Those who are renting are the more downbeat about the future movement in house prices at 55.6. Those aged between 45 and 54 expect the biggest increase in the value of their home over the next year, followed by those aged over 55. In contrast, those aged 18 to 24 are expecting more moderate price rises.

This age gap is also mirrored in earnings data, with the highest earners, those earning more than £57,800 a year, are expecting the largest increases in prices over the next 12 months, with a reading of 79.9, although this is down from the record high of 81.1 seen in July.

Gráinne Gilmore, head of UK residential research at Knight Frank, said that 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,’ she explained.

‘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,’ she added.

UK house prices look set to continue rising in the coming months, according to Chris Williamson, chief economist at Markit. ‘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,’ he said.

‘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,’ he explained.

‘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,’ he added.

This article was republished with permission from Property Wire.

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