Perceptions of house price growth are now at their highest level on record, according to Knight Frank. Households in every region now expect the price of their property to rise over the next 12 months. Just one in fourteen expect values to decline during the coming year. Unsurprisingly, London and the south-east expect the biggest rise in prices regionally, while mortgage borrowers and those that own their home outright anticipate the greatest growth over the next year.
This bodes well for property investment and over 2014 demand is likely to increase. In October it was perceived that values grew for the seventh consecutive month. The House Price Sentiment Index from Knight Frank and Markit Economics showed more than 23 per cent of 1,500 homeowners surveyed believe the price of their home to have increased, up from 6.3 per cent in October 2012. With just five per cent of households perceiving the value of their property to have declined, this has given a reading of 59.1.
Up from last month's record reading of 57.9, this is the highest recorded level since the index began in February 2009 and represents the most sustained period of upward price movements in three years. Regionally, the only areas not to report record rising values were the north-east, the East Midlands, the east of England and Wales.
When it comes to future gains, the reading for what households think will happen to their property's value over the next year rose to 71.1 - a jump from 69.6 in September and another record high.
Gráinne Gilmore, head of UK residential research at Knight Frank, said: "The momentum in house price expectations gained over the past few months continued this month, with households across the country expecting the value of their home to rise over the next 12 months. This is the latest evidence of increased confidence in the market, which has been boosted by the government’s Help to Buy mortgage guarantee scheme, introduced at the start of the month."
House price optimism - what does it really say?
- Thursday 24 October 2013