Public remain buoyant about property market

Households in all UK regions perceived that house prices increased this month, according to Knight Frank’s latest House Price Sentiment Index.

This is the first time in the Index’s six-year history that sentiment has risen in August.

The survey found that households in the south east currently perceive the highest rate of house price growth.

It also confirmed that households in all UK regions expect prices to rise over the next 12 months, although the rate of expected increases has eased in many regions.

Some 6.6% of households surveyed said they expect to buy a home over the next 12 months, up from 5.3% in July and the joint highest percentage recorded since July 2014.

“The strength of the UK economy, rising wages and an undersupply of housing stock on the market are combining to underpin UK house prices. This has resulted in the first rise in the House Price Sentiment Index in August, usually a quieter summer period, seen since 2009,” says Grainne Gilmore, head of UK residential research at Knight Frank.

“However the expectation of future interest rate rises, something about which the Bank of England rate-setters are issuing more frequent warnings, is having an impact on the expectations for future house price increases. While households still expect the value of their home to rise over the next 12 months, the pace of the expected rise has eased in recent months,” she adds.