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UK house price sentiment up despite election fever

UK households perceive that the value of their home rose in April despite the uncertainty being created by the forthcoming general election, the index shows.

Dubai — The outcome of the UK election may be uncertain, but it’s not harming house price sentiment, according to the House Price Sentiment Index, or HPSI, from Knight Frank and Markit Economics.

UK households perceive that the value of their home rose in April despite the uncertainty being created by the forthcoming general election, the index shows. British Labour Party leader Ed Miliband, according to media reports, said a Labour government would exempt first time buyers in England, Wales and Northern Ireland from paying stamp duty when buying homes below £300,000, for three years.

Nearly 21 per cent of the 1,500 households surveyed across the UK said that the value of their home had risen over the last month, while 4.5 per cent reported a fall, according to the HPSI.

This gave the Index a reading of 58.2, the 25th consecutive month that the reading has been above 50 and a slight increase on last month’s reading of 57.5, indicating that households believe prices continued to rise in spite of the uncertainty surrounding the outcome of the election.

“The outcome of the election may be uncertain, but there are some key factors underpinning house prices at present. Confidence in the economy continues to grow while the cost of living has stopped rising,” said Grainne Gilmore, head of UK residential research at Knight Frank.

“Mortgage rates have dipped to a new low, making owning a home for those who can clinch a mortgage deal cheaper than at any time before. The cost of buying a home for the majority of purchasers has also fallen after the reform of stamp duty in December last year. A lack of supply of homes for sale in recent months has also boosted prices,” she explained.

The future HPSI, which measures what households think will happen to the value of their property over the next year, also rose in April to 70.2, up from 69.6 in March and the highest reading so far this year.

Households in all monitored UK regions perceive that property prices rose in April, with expectations for future price growth also increasing, the second consecutive month they have done so.

— abdulbasit@khaleejtimes.com