Expectations for future price growth ticked up, but still remain substantially lower than May’s record-high.
Households in the South East expect prices to rise most strongly over the next 12 months, the third consecutive month expectations in this region have been higher than London. Some 5.9% of UK households plan to buy a property in the next year.
Some 28.9% of the 1,500 households surveyed across the UK said that the value of their home had risen over the last month, while 5.3% reported a fall.
Gráinne Gilmore, head of UK residential research at Knight Frank, said:
“A third consecutive monthly decline in the house price sentiment index suggests that the price exuberance seen in some corners of the market is easing. This comes amid increasing discussion about interest rate rises, which are likely to materialise within the next 6 to 9 months. Recent changes to the rules surrounding mortgage lending are also likely having an impact on market sentiment.
“Yet the index also highlights the regionalised nature of the housing market. While the HPSI reading for London, where average house prices have seen the biggest increase in the last year, showed a slight increase in August, this was far overshadowed by the rise seen in the North East and North West of England. These regions are starting to experience some level of sustained house price growth amid growing buyer confidence.”
Tim Moore, senior economist at Markit, said:
“UK house price sentiment remains strong overall, although it has cooled in each month since hitting a post-crisis peak in May. Not only does the sweet spot appear to have passed for house price sentiment, but the current period of decline is now the longest seen for almost four years.
“Moreover, tighter mortgage conditions and the prospect of interest rate rises have acted to rein in households’ expectations of higher property values over the year ahead.”
