UK home owners believe that the value of their property declined over the last month, for the 31st consecutive month, albeit at the joint slowest rate since July 2010, new research shows. However, those in eight of the 11 regions covered by the latest house price sentiment index from Knight Frank and economics consultancy Markit expect that the value of their home will rise in 2013.
Londoners’ are more positive about the prospect of their homes rising in price over the next 12 months than at any time since June 2010. The index is based on a survey of 1,500 households across the country and asked them whether they think the value of their home will rise or fall over the next year.
Those in the South East and South West are also upbeat about price rises but households in Wales expect prices to fall, as do those in Scotland and the North East. The proportion of homeowners reporting that the value of their home had risen was 7.7%, the same as in December, while 13% said the value of their home had fallen, compared to 14% last month.
This resulted in a HPSI reading of 47.6, matching the reading in November, and which together are the highest readings since July 2010, indicating that house prices fell more modestly during these months than any time over the last two and a half years. Any figure under 50 indicates that prices are falling, and the lower the figure, the steeper the decline. Any figure over 50 indicates that prices are rising.
The future HPSI which measures what households think will happen to the value of their property over the next year, rose showing an increased confidence that prices would rise modestly in 2013. The research also shows that the number of regions expecting price rises this year has risen to eight, up from six in December. Londoners expect the biggest lift in the value of their homes over the next 12 months than at any time since June 2010, with a reading of 65.5 but a North-South divide is evident and those living in Wales, the North East and Scotland expect prices to fall.
Quote from PropertyCommunity.com : “Home owners in the UK, who failed to sell their property in 2012, need to consider new options if they want to be successful in 2013.”
‘Households have started the New Year with optimism over the outlook for house prices in their area, shrugging off gloomy news over the economy. There has been some good news from the housing market however, with a modest pick-up in mortgage lending and signs that mortgage rates are starting to recede, especially on deals available to those with modest deposits,’ said Gráinne Gilmore, head of UK residential research at Knight Frank.
“There are hopes that the Bank of England’s multi-billion Funding for Lending scheme will lead to a further rise in mortgage lending and larger declines in mortgage rates, but there is little evidence of this so far. London has stood out in terms of house prices in recent years, but there are signs that the market could be picking up outside the capital, especially in the South West and South East, boosted by outperformance in those regional economies,’ she added.
According to Tim Moore, senior economist at Markit, January’s survey suggests households are increasingly conscious that the Bank of England’s Funding for Lending Scheme has the potential to boost the UK property market in 2013.
‘Year ahead expectations for house prices are now much stronger than was the case at the announcement of the scheme last summer. Indeed, people living in private rented accommodation, who are perhaps the cohort most likely to be waiting on improved access to mortgage finance, were also the most likely to anticipate property price rises in 2013,’ he said.