The sentiment of the property market in the UK

Almost 30% of homeowners in the UK believe that the price of their house or apartment will grow. And only 4.4% think that prices will fall. The so-called “sentiment” from the powerful estate Agency knight Frank and Markit Economics according to the results of the June survey were published recently.

About 29.3 per cent of the 1,500 surveyed across the UK homeowners are in optimistic mood about the growth of prices for their housing.

The HPSI indicator – sentiment index slipped slightly after a peak in may 2014, but the fact that the index is above 50 for the fifteenth consecutive month, suggests that the real estate market in the UK is the unprecedented level of optimism.

Confidence in the growth of the market is felt in every region of the UK. However, optimistic expectations are now much higher in the regions than in London – in London the level of optimism falls for second month in a row after a record high in April 2014 at the level of 83.1. This is the first significant decline in expectations since October 2011, which suggests that homeowners have become more cautious in their expectations.

The decrease of optimism in London may well be caused by the talks on the introduction of higher interest rates by the Bank of England, as a cooling of the market. Talking about it consistently exaggerated in the press for two months. It is not excluded that the interest rate will increase before Christmas, which, respectively, will contribute to the rise in mortgage loans and certainly affected the mood of the real estate market. Despite the fact that in may in 6 out of 11 regions of Britain, property prices have set records in June, a record price was broken only in the South-East of the country.

The index also showed that 6.2% of homeowners plan to buy property in the next 12 months, and 17.2% of respondents intend to buy a property in the next 5 years.

Overall, all respondents agree that property prices in the United Kingdom will grow, but the growth rate until the end of 2014 will be slightly lower than in the 1 half of 2014.

® Alice Morgan G. 26.06.2014

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