18 month high in House Price Sentiment Index (HPSI) in February
According the to House Price Sentiment Index (HPSI) published by Knight Frank and Markit Economics that 23.2% of the households surveyed across the UK said that the value of their home had risen over the last month, resulting in a HPSI reading of 59.6. This is the highest recorded since October 2014.
A figure above 50 means homeowners believe prices are rising and below 50 that prices are falling. The HPSI has now been above 50 for the last 35 months indicating confidence is strong. All 11 regions of the UK reported a figure above 50.
Gráinne Gilmore, Head of UK Residential Research at Knight Frank, said: “The HPSI indicates that house prices are set to continue to tick up modestly in the coming months. The market is being underpinned by the solid economic recovery and ultra-low interest rates – which now look as if they will stay put for some time to come.”
Tim Moore, senior economist at Markit, said “February’s survey highlights a continuation of the steady upward trend in UK house price sentiment from the pre-election lows seen in early 2015. While pay growth has been sluggish and the economic outlook weakened in recent months, a resultant expectation that interest rates will stay low for longer seems to have boosted UK house price perceptions at the start of 2016. In fact, survey data from Markit indicates that less than half of UK households (46%) expect a Bank of England rate rise over the next 12 months, down sharply from 71% in January and the lowest proportion since October 2013.”