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UK house price sentiment rising

Price growth3

UK homeowners believe that the value of their property is increasing, according to the latest nationwide survey.

The new House Price Sentiment Index (HPSI) from Knight Frank and IHS Markit found that 17.7 per cent of homeowners believe that their home is worth more in May than it was in April. In contrast, just 6.5 per cent of households think their property is worth less.

Ten months of growth

Overall, the HPSI for May had a reading of 55.6. Any figure over 50 indicates that prices are rising, and the higher the figure, the stronger the increase. Conversely, any figure below 50 indicates that prices are falling.

May’s reading was the tenth consecutive month that the index has been in positive territory, following the post-referendum low in July 2016.

Households in all of the 11 regions covered by the index perceived that the value of their property rose in May, with the positive sentiment extending to the year ahead.

Positive outlook

The future HPSI, which measures what households think will happen to the value of their property over the next 12 months, stood at 64.5 in May. On a regional basis, all 11 regions of the country expect price rises, including the North East (56.5), Yorkshire and the Humber (57.8) and Scotland (60.5).

Oliver Knight, associate in Knight Frank’s Residential Research team, said the latest survey shows a slight moderation in both current and future house price sentiment, with values increasing at a more modest pace than before the EU Referendum, consistent with wider property market trends.

He added that the “recent softening in sentiment” in the immediate run up to the General Election in June could be a reaction to the “slight uncertainty” that inevitably comes with a vote.

Contrasting figures

It comes after the new Halifax House Price Index revealed that UK house prices have fallen for the first time in five years.

The monthly report shows that there was a 0.2 per cent reduction in the average property price in the three months to April 2017, compared with the previous quarter, which is the first recorded fall since November 2012.

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