Households believe that the price of their property rose in May at the fastest rate for nearly three years.
According to the Knight Frank/ Markit House Price Sentiment Index (HPSI), 13.5 per cent of homeowners think that the value of their home increased during the past month, the highest proportion since June 2010.
By contrast, only nine per cent of households thought that the value of their home had fallen during the same period. This gave May a HPSI reading of 52.2, compared to the 50.6 recorded in April.
Readings under 50 indicate falling house prices, while those over 50 show a rise. The further the figure from the 50 mark, the steeper the move.
Perhaps unsurprisingly the fastest rate of increase was recorded in London. Indeed this region saw the quickest uptick since the index began in February 2009.
However, although there were some regions differences about house price sentiment this month, households in all regions showed optimism that values will rise in the next 12 months.
“Optimism that the government’s Help to Buy scheme will have a positive impact on house price movements remains strong this month, the index suggests, especially among first-time buyers,” said Grainne Gilmore, head of UK residential research at Knight Frank.
“While the headline data suggests a sea-change in sentiment over the future movement of house prices across the country, the regional data still shows a more patchwork picture.”
Indeed, sentiment in the North East was the most pessimistic with a HPSI reading of just 46.6, Scotland saw 48.4 and the East Midlands did not fare much better with 48.6.
In contrast, London saw sentiment of 64.7 and the South East were similarly optimistic with 52.4.
Tim Moore, senior economist at Markit, said that the recent extension of the Funding for Lending scheme is expected to boost mortgage lending and generate a significant uptick over the next few months.
He added that better affordability is offsetting the weak labour market conditions to improve house price expectations.
- Tuesday 21 May 2013