Another monthly round up of what the property market in UK looked like in February. Experts are still firm on the fact that the shortage of homes is slowly but surely driving property prices up.
Knight Frank IHS Markit House Price Sentiment
Households across the UK perceive that the value of their home has risen over the last month, according to the latest House Price Sentiment Index (HPSI) from Knight Frank and IHS Markit. February’s reading was the seventh consecutive month that the index has been in positive territory and now stands at a new post-referendum high.
Gráinne Gilmore, head of UK residential research at Knight Frank, said: “The rise in household sentiment on house prices comes as a less cloudy picture of the UK economy starts to emerge. Earlier this month the Bank of England revised up its forecasts for GDP growth, and although the country still has to negotiate a withdrawal from the EU, the immediate economic conditions remain positive. Homebuyers and homeowners are also benefitting from near record-low mortgage rates, although affordability is an increasingly pressing issue in some areas.
RICS February 2017: UK Residential Market Survey
With demand flat and the supply of new property continuing to slip, the national agreed sales indicator pointed to another steady month for transactions, posting a reading of +2% (following -2% previously). Sales activity appears to have picked up in London after nearly a year of negative to flat growth. Tight supply conditions across a majority of the regions coupled with stable sales activity has led to a further erosion of available stock for sale, with the average stock per surveyor just shy of a record low. Indeed, respondents across most parts of the UK continue to highlight in their comments the supply shortage to be very dominant feature of the market at present.
House prices in the three months to February were 5.1% higher than in the same period a year ago.
Martin Ellis, Halifax housing economist, said:
“Housing demand is being supported by an economy that continues to perform well with employment still expanding. Meanwhile, the supply of both new homes and existing properties available for sale remains low. This combination is pushing up prices.
Nationwide House Price Index February 2017
Robert Gardner, Nationwide's Chief Economist, said: “The outlook is uncertain, but we, along with most other forecasters, expect the UK economy to slow through 2017 as heightened uncertainty weighs on business investment and hiring. Consumer spending, a key engine of growth in recent quarters, is also likely to be impacted by rising inflation in the months ahead as a result of the weaker pound.
“Nevertheless, in our view a small rise in house prices of around 2% is more likely than a decline over the course of 2017, since low borrowing costs and the dearth of homes on the market will continue to support prices.
