Knight Frank, the international property consultancy have released their House Price Sentiment Index. It says that every region reported falling property values, the first time this has happened since February. Households in only three regions expect prices to rise in the coming year and UK households now perceive that the value of their home declined again in October. The survey covered 1,500 households across the UK. Even Londoners reported price falls, the first time this has happened since February this year.
As well as looking at homeowners perceptions of current house prices the HPSI also looks at people’s expectations for property prices. Landlord insurance clients may find this section particularly interesting. It is an opinion based survey that measures what people think will happen to the value of their home in the future. Knight Frank say it has since its inception been a clear lead indicator for house price trends. Around 24% of households anticipate a rise in the value of their home over the next year, while 23% anticipate a fall. This means that the index reading is down from the September figure and marks a sharp fall in the future price index.
It does not come as much of a surprise to see that households in both London and the South East are sill expecting healthy rises in prices over the next year, although the future HPSI reading for London is the lowest since January 2012. Landlords are often more concerned about the likely level of rents in the future than house prices but both aspects are important to the success or failure of a letting business.
The HPSI is published by Knight Frank and Markit.