House price sentiment now at post-EU referendum high
According to the latest house price sentiment index from Knight Frank and IHS Markit, some 20% of the 1,500 households surveyed across the UK said the price of their property had risen over the last month – making it the seventh consecutive month that the index has been in positive territory.
Despite this, sentiment in February still remained well below its peak in May 2014, which Knight Frank said reflected an increasing moderation in house price growth.
Positive sentiment was strongest among households in the capital and east of England, with these regions reporting the biggest rise in perceived house price growth during February, while Wales reported a slight fall in prices over the course of the month.
Tim Moore, senior economist at IHS Markit, said a combination of the improved economic backdrop, resilient labour market conditions and low mortgage rates was boosting confidence among homeowners.
“The upward direction of travel for housing market sentiment in February has seen property price expectations recover to levels seen just ahead of the EU referendum, with this pattern apparent among households in all UK regions,” he said.
“Brexit-related anxieties appear to have receded among buyers, but there remains a sizeable list of factors likely to keep a brake on price momentum during the year ahead. These include localised affordability constraints for first-time buyers, generally subdued pay growth, and a renewed squeeze on household budgets from rising living costs.”