Confidence begins to return to UK housing market

Confidence is beginning to return to the UK housing market, following a slight dip after the Brexit referendum.

The latest Halifax research shows that nine months on from the country’s vote to leave the European Union, confidence in property values is rising. Following a 14 percentage point drop in the HPO in October 2016, there was a modest increase in March 2017, from +42 to +44.

This figure is driven by a one percentage point decrease in expectations that average UK property prices will be lower in twelve months’ time (down from 15 per cent in October 2016) and a corresponding one percentage point increase in expectations that average UK prices will be higher in a years’ time (up from 57 per cent).

Buying sentiment has continued a steady decline, dropping by three percentage-points from +17 in October 2016, and is at the lowest point since September 2014, whereas the selling sentiment shows an eight percentage-point increase (up from +9 in October 2016). This rise in selling sentiment follows a 22-point drop between March and October 2016, thus still remaining below pre-Brexit levels.

The survey was the 27th undertaken by Ipsos MORI for Halifax since its inception in April 2011. Over that time the House Price Outlook has been positive on all but one occasion. And while buying sentiment has changed comparatively little, selling sentiment has risen as confidence in property price rises has grown. Since April 2011, the average UK house price has risen from £160,785 (April 2011) to 219,949 (February 2017) according to the lender’s data.

 

UK house price sentiment holds steady

28th March 2017

The mood remains broadly positive in the UK housing market, with homeowners still confident that their house prices have risen this year.

The latest House Price Sentiment Index from Knight Frank and IHS Markit shows that households in nine of the 11 regions covered by the index perceived that the value of their property rose in February. Those in the South East (64.4) reported the biggest rise over the course of the month, closely followed by Londoners (64.0). Households in the North East (48.2) and Wales (49.3) were the exceptions, with households reporting a slight fall in prices over the course of the month.

March’s reading was the eighth consecutive month that the index has been in positive territory.

 

Confidence in UK house prices hits post-referendum high

24th January 2017

The mood is firmly upbeat in the UK at the start of 2017, with confidence in UK house price growth hitting a post-referendum high.

The latest House Price Sentiment Index (HPSI) from Knight Frank and IHS Markit saw its measurement of what households think will happen to the value of their property over the next year rise in January to 65.5, up from 62.3 in December. This is the highest reading achieved by the index since before the UK’s referendum on EU membership, although it remains below the peak of 75.1 achieved in May 2014.

Gráinne Gilmore, head of UK residential research at Knight Frank, says: “The continued rise in the future sentiment index indicates that households are not focusing solely on the uncertainty around the path to Brexit. The economic fundamentals in the UK are relatively strong, with the country expecting to have experienced the strongest growth in GDP of any country in the G7 for 2016. The IMF has also revised up its forecasts for economic growth in 2017.

“At the same time, for those who have access to a deposit, mortgage rates are near record-lows. The lack of supply of new and second-hand housing stock for sale is also underpinning pricing, which is causing affordability issues is some areas. The Government is determined to try and boost the delivery of new-build homes, and will publish details of its plans in a Housing White Paper shortly.”

Households across the UK also perceive that the value of their home has risen over the last month, with January’s HPSI reading the sixth month in a row that the index has been in positive territory, following a post-referendum low in July. Some 17 per cent of the 1,500 households surveyed across the UK said that the value of their home had risen over the last month, while 5.3 per cent said that prices had fallen.

Tim Moore, senior economist at IHS Markit, adds: “The recovery in housing market confidence has been helped by sustained growth across the UK economy during recent months, and resilient labour market conditions in particular. Regional divergences showed little sign of narrowing in January, with people living in London and the South East by far the most likely to anticipate rising property values.”

 

Confidence in UK house prices stabilises post-referendum

23rd November 2016

Confidence in UK house prices is stabilising following the EU referendum, as households still expect values to climb.

The latest Knight Frank and IHS Markit House Price Sentiment Index shows that households across the UK believed that their house price rose in November for the fourth month in a row, although this was also the second month in a row that confidence eased slghtly, mirroring the wider trend in price growth since June’s vote.

The north-south divide in the country is still apparent to some degree. Households in seven of the 11 of the regions covered by the index perceived that the value of their property rose in November, with households in the South East reporting the biggest rise. They were followed by those in London and the East of England. Households in the North East and Yorkshire believe that prices fell over the course of the month, while those in Scotland and the North West perceived no change in the value of their homes over the course of the month.

Gráinne Gilmore, head of UK residential research at Knight Frank, says: “Sentiment in the housing market is finding a post-EU vote stability. While households are confident that the value of their home is rising and will continue to do so over the next 12 months, they expect the velocity of this change to be lower than before June’s vote. This chimes with the increased economic uncertainty as the UK starts to negotiate its way out of the EU. However, opinions on the housing market are also formed at a local level, and in many cases markets are characterised by a lack of supply of homes to purchase, which is underpinning pricing.”

Regional variation remains, however, with hose in the South of England comfortably more confident that prices will rise than those in the North, Scotland and Wales.

 

Confidence in UK house prices continues to bounce back

24th October 2016

Confidence in UK house price growth continues to bounce back from the EU referendum this autumn.

18.4 per cent of households across the UK said their house price had risen in the last month, according to Knight Frank’s latest House Price Sentiment Index survey, almost three times as mnay as the 7 per cent that said prices has fallen. The result was the third month in a row of positive sentiment towards UK house prices.

October’s reading was slightly below the figure recorded in September, but remains higher than the post-referendum average reading, reflecting the general bounceback in sentiment which has been seen since the vote.

The future HPSI, which measures what households think will happen to the value of their property over the next year, also slipped slightly in October to 62.9 from 64.7 the previous month. Households are expecting more modest growth in property prices over the next 12 months than they were in September, but the mood remains more upbeat than when the referendum took place.

Since the recent index low immediately following the Brexit vote, households in the South West have seen the biggest sustained rebound in terms of their expectations for future growth, from 51.7 in July to 70.8 in October.

Gráinne Gilmore, head of UK residential research at Knight Frank, says: “The index has dipped slightly in October, but the significant uptick in sentiment since the vote to leave the EU is clear: This month, 12 per cent of households said they expected the value of their home to fall over the next 12 months, down from the 23 per cent seen in the month after the Brexit vote. 18 per cent expect a rise in prices, above the reading of 11.2 per cent in July.

“Lower interest rates and stable mortgage availability have acted as shock absorbers for household sentiment in recent months,” says Tim Moore, senior economist at IHS Markit, which publishes the report with Knight Frank. “However, expectations for house price growth are softer than in the first half of 2016, suggesting that affordability constraints and Brexit uncertainty are still putting the brakes on price momentum.”

 

UK confidence in house prices continues post-Brexit rebound

26th September 2016

UK confidence in house prices is continuing to rebound in the wake of the Brexit vote.

The decision to leave the European Union prompted fears that property values would plummet, as buyer activity slowed down during the summer season, but confidence is now showing signs of returning to the country, both in the economy and the housing market.

According to the latest House Price Sentiment Index from Knight Frank and IHS Markit, households across the UK perceived that the value of their home rose in September for the second month in a row. September’s reading of 56.9 was the largest month-on-month increase in the index in seven years.

However, in spite of the jump, the index remains below the average reading for the first six months of the year, prior to the EU Referendum.

The future HPSI, which measures what households think will happen to the value of their property over the next year, also rose. However, while future sentiment has risen notably month-on-month and is comfortably above its recent post-EU Referendum low in July, it similarly remains lower than seen during the three years prior to the vote.

Gráinne Gilmore, head of UK residential research at Knight Frank, says: “House price sentiment is mirroring the broader pick-up in confidence after Brexit. This comes as initial data shows a continuing positive picture for both employment and economic output. The housing market is now entering the typically busier autumn season, with indications that activity is rising, especially in key urban areas.”

 

What your Brexit vote reveals about your house price

8th July 2016

Much has been made of the UK’s recent EU referendum and what its impact will be upon house prices, but new research suggests that your vote reveals a lot about your house price before Brexit.

A study from online estate agent HouseSimple.com found that areas with the highest proportion of Remain votes have seen average property prices increase £61,785 (18 per cent) since 2011, while average property prices have risen half as much (by £33,128, or 9 per cent) in the areas with the highest proportion of Brexit votes.

HouseSimple took a sample of 80 local authorities and how they voted in the recent EU referendum, then looked at the 20 areas with the highest percentage of Leave votes and 20 with the highest Remain votes and compared how property prices have fared in those areas over the past five years. Across the entire sample of 80 councils, average house prices have risen 19 per cent in Remain areas versus 15 per cent for Leave.

The areas with the highest Brexit vote – Burnley and Hartlepool – have seen the biggest decrease in property values in the UK since 2011, with prices down 8 per cent (£2,792) and 5 per cent (£9,805) respectively.

By comparison, Cambridge, which had the second highest percentage of Remain votes, after Edinburgh (74.4 per cent), experienced a property price rise of 43 per cent, or £180,687, in the last five years and Brighton and Hove, which voted to Remain by 68.6 per cent, saw property prices increase 25 per cent, or £96,522, in the same period.

In London, the five areas that voted to leave the European Union are among the London areas with the lowest property price increases in the last five years, with increases of 30 per cent in Havering and Bexley, 34 per cent in Sutton, 35 per cent in Hillingdon and 37 per cent in Barking and Dagenham – compared to the 41 per cent London average.

On the other side of the fence, the boroughs with the highest Remain vote – Hackney, Lambeth and Islington – have experienced some of the biggest increases in property value in the capital since 2011: 62 per cent in Hackney to £533,875, 50 per cent in Islington to £665,791 and 49 per cent to £526,337 in Lambeth.

Alex Gosling, CEO of online estate agents HouseSimple.com, comments: “It’s not cause and effect but it’s sure to have had some influence on voters’ decisions last week. And as we saw in the voting, the country is also divided when it comes to property growth. Many areas of the country, particularly in the North, haven’t enjoyed the boom times since 2011 experienced in London, which voted strongly to remain in the EU.”

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