Uk Housing Market Outlook Improves
The outlook for UK house prices has remained positive for the fourth consecutive month
, according to the latest Knight Frank/Markit House Price Sentiment Index.
Seven regions expect price rises over the next 12 months - while the future house price sentiment index remains at a near 20-month high.
This positive forecast comes despite UK households perceiving a decline in value of their homes for the 23rd successive month in May.
The Index indicates that average prices fell again May. A decline in home values was reported by 17% of households, while 9.5% signalled that the value of their property rose.
At 46.3, the resulting HPSI figure is up from Aprils reading of 45.4 and just under Marchs 20-month high of 46.6.
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.
As has been the case for the past three months, households in all but one region signalled that the value of their property had fallen in May.
The survey of 1500 households across the UK showed that sentiment was weakest in the North West (41.0) and West Midlands (42.5), indicating accelerated price falls.
London bucked the trend again, with those living in the capital reporting that the value of their home had risen for the third month running, but at a much slower pace than in April (50.9, down from 53.6). Households in the South East (49.2) expect only minimal falls in prices, indicating that the north-south divide in house price movements continued in May.
Grainne Gilmore, head of UK residential research at Knight Frank, said: "Despite reporting another month of house price falls in May, households remain confident that the value of their home will rise in future.
"In fact households seem to have shrugged off the negative economic news about the UKs double-dip recession and the new problems facing the euro zone, and the impact these factors could have on house prices, with most regions confident that the value of their home will rise at least modestly over the next 12 months.
"As is perhaps to be expected after the recent price performances in the capital, those living in London expect the biggest price growth over the next year. At the same time, optimism in the South West of England slipped for the first time since January, underlining the increasingly regional nature of the UK housing market.
"It will be interesting to see what effect the 'feel-good factors' of bank holidays and the Jubilee have on house price sentiment next month."
Tim Moore, senior economist at Markit, said: "UK house price sentiment for the year ahead remained surprisingly resilient in May, with households brushing off recent falls in property values and an intensification of the negative economic news flow. The north-south sentiment divide showed no sign of closing, and if anything widened slightly since April.
"There is, however, some evidence that sentiment among mortgage holders has started to waver, perhaps reflecting worries over higher standard variable rates coming into effect.
"People with a mortgage defied the overall trend and noted the weakest future sentiment for four months. They also reported a much faster monthly reduction in property values than the average for all types of households in May."
by: Investor Today
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