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Households in the UK perceive that the value of their home rose in April despite the uncertainty being created by the country’s forthcoming general election, the latest sentiment index shows. Some 20.9% of the 1,500 households surveyed across the UK said that the value of their home had risen over the last month, while 4.5% reported a fall, according to the House Price Sentiment Index (HPSI) from Knight Frank and Markit Economics. This gave the HPSI a reading of 58.2, the 25th consecutive month that the reading has been above 50 and a slight increase on last month’s reading of 57.5, suggesting that households believe prices continued to rise in spite of the uncertainty surrounding the outcome of the election. ‘The outcome of the election may be uncertain, but there are some key factors underpinning house prices at present. Confidence in the economy continues to grow while the cost of living has stopped rising,’ said Grainne Gilmore, head of UK residential research at Knight Frank. ‘Mortgage rates have dipped to a new low, making owning a home for those who can clinch a mortgage deal cheaper than at any time before. The cost of buying a home for the majority of purchasers has also fallen after the reform of stamp duty in December last year. A lack of supply of homes for sale in recent months has also boosted prices,’ she explained. The future HPSI, which measures what households think will happen to the value of their property over the next year, also rose in April to 70.2, up from 69.6 in March and the highest reading so far this year. According to Tim Moore, senior economist at Markit, the UK housing market showed resilience in the face of upcoming election uncertainty, with April’s survey highlighting the first back to back monthly rise in house price sentiment for almost a year. ‘Reduced pressure on household finances, improving labour market conditions and low mortgage rates continued to support house price sentiment in April. However, stretched affordability and tighter lending conditions are keeping a lid on house price momentum,’ he said. He pointed out that on a regional basis, people living in the East of England are the most likely to anticipate rising property values over the next 12 months, followed by those living in the South East. Meanwhile, the gap between UK wide house price growth expectations and those in the capital fell to its joint lowest since the start of 2011. The report also shows that some 6.5% of UK households said they planned to buy a property in the next 12 months, up from 5.7% in March. On a regional basis, nearly one in 10 households in Wales is planning a purchase in the next 12 months, followed by those in the East of England where 9.5% of households said they would be buying a property in 2015. Individuals aged between 25 and 34 are more likely to be considering buying a home in… Continue reading →
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