The sentiment towards further house price growth remains positive across the whole country, according to the Knight Frank/Markit House Price Sentiment Index (HPSI) for July.
UK households in all eleven regions said house prices increased in July and are expecting further growth in the next 12 months. Most upbeat about a future rise in prices are households in the South East and London.
While the index in July showed a slight decrease on June, it still is the second-highest index so far this year and suggests that households across the UK are still confident that prices are rising.
Younger people are the most keen on buying a new home within the next 12 months, with the biggest proportion of aspiring homeowners recorded in the 25-to-34 age group (9.7 per cent). Prospective buyers aged 35 to 44 were second in line with 5.6 per cent of them saying they want to purchase a property within a year.
Grainne Gilmore, head of UK residential research at Knight Frank, said:
“Overall expectations for future house price growth remain firm, underpinned by a strengthening labour market, improving economy and ultra-low mortgage rates. There is now more discussion about possible interest rate rises, but this, as well as the property tax announcements in the Summer Budget, has had little impact on average expectations for the direction of travel for house prices.
“However, there are regional differences in the data, with the widest spread between the future HPSI reading in the North East and London than at any time since March last year, reflecting the differing dynamics of housing markets across the country, with local economic factors leading to a disparity in the levels of house price growth.”
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Commenting on the figures, Andy Sommerville, director of search provider Search Acumen, said:
“Consistently rising house prices have become a fact of life for the residential property market in recent years, but it’s a worrying sign on the surface that this appears to be dampening people’s purchasing plans over the next 12 months.
“All the same, the market is yet to see the full impact of Mark Carney’s comments about an impending interest rate rise. The prospect of mortgage price increases in the near future may prompt households to reconsider their plans, and bring extra momentum to the second half of 2015 as buyers look to get in ahead of rising loan and house prices.
“Despite seeing some of the highest expectations for house price growth over the next 12 months, London and the South East are among the regions where intentions to purchase are the highest for the year ahead. Improving equity in their homes will help to give existing homeowners in these areas more financial clout.
“The data suggests conveyancers in these regions can look forward to a particularly busy period, to build on the 16-month high for transactions recently reported by HMRC.”
