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Home owners’ expectations high for rising house prices



With last month’s general election out of the way, home-owners’ confidence in a rise in UK house prices in the coming months has hit its highest level since last autumn, according to a new survey.

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The latest Knight Frank/Markit House Price Sentiment Index shows that households in all UK regions perceived that property prices rose in June, with the largest of those rises felt in London.

Grainne Gilmore, head of UK residential research at Knight Frank, said, "Households' expectations for house price rises have reached the highest level this year as the results of the General Election provide some clarity on the outlook for the housing market and household finances.

"Interest rates remain advantageous, with mortgage rates hitting record lows for those who can clinch a new deal.

"However the future house price index still remains below levels seen last year as constrained mortgage lending and affordability affect the market."

Chris Williamson, chief economist at Markit, added, "House price growth looks set to revive again after what appears to have been a lull due to the general election.

"The resumption of political stability is clearly good for the housing market. At the same time, survey data shows that low inflation has meant home-owners have pushed back their expectations of when interest rates will start rising, adding fuel to the bullish view on house prices.

"Notable exceptions are Scotland and Wales, where devolution uncertainty seems to have led to marked falls in views on future prices in June following the election."

Households in the South East and London expect the strongest price rises over the next 12 months and the index suggests that some 6.6 per cent of UK households plan to buy a property in the next year.

Of the 1,500 households surveyed across the UK, 23.7 per cent said the value of their home had risen over the past month, while only 4.6 per cent reported a fall.

This gave a reading of the index of 59.5, the highest since last October. Any reading above 50 represents a majority expecting price rises and this is the 27th consecutive month of readings above the 50 mark.

However, the index is still some way below the record high of 63.2 notched up in May of last year.

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