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Confidence for House Price Growth Reaches Post-Brexit High

The proportion of households across the UK that believe house prices will increase further in 2017 reached a post-referendum peak in January, said Knight Frank & IHS Markit.

The proportion of households across the UK that believe house prices will increase further in 2017 reached a post-referendum peak in January, said Knight Frank & IHS Markit.

January’s House Price Sentiment Index (HPSI), compiled monthly by Knight Frank & IHS Markit, showed 17% of the 1,500 households surveyed believed that house prices had risen over the month, resulting in an index reading of 55.8.


With anything above the 50 mark indicating an improvement, January’s HPSI signals a strong start to the year, although it dipped slightly from December’s reading of 56.1.


The anticipated house price trend for the year improved from the rating in December, with January’s ‘future HPSI’ standing 3.2 index points higher than in the previous month – rising from 63.2 to 65.5.


The reading marks the highest level recorded since before the UK’s referendum, with a total of 40% of households surveyed expecting price rises compared to just 9% whom fear a decline.


Knight Frank and IHS Markit’s report also highlights regional differences across the country, with respondents in London (71.2) and the South East (71.0) expressing higher confidence that the value of their home will rise over the next 12-months.


Commenting on the report, IHS Markit’s senior economist, Tim Moor, said:


“The recovery in housing market confidence has been helped by sustained growth across the UK economy during recent months, and resilient labour market conditions in particular.


“Regional divergences showed little sign of narrowing in January, with people living in London and the South East by far the most likely to anticipate rising property values.


“However, UK house price sentiment remains softer than seen during the three years leading up to the EU referendum. January’s survey also highlights that price expectations in all regions have moderated in comparison to those seen at the start of 2016.”


Last week, the Royal Institute of Chartered Surveyors (RICS)’s latest survey found that 55% of respondents reported a rise in house prices in December, with those in the North West leading the group.

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