Confidence in the housing market remains high with homeowners expecting property prices to increase by 4.8% in the coming six months. Despite the recent slowdown in house price growth, 81% of people think property values will increase in their area, according to Zoopla. But there was significant regional variation, with homeowners in Yorkshire and Humber most likely to predict further price rises at 91%, while a third of people in London expect house price falls. Those in the northern regions tended to be more optimistic about the outlook for the housing market, while those in southern ones were most likely to expect a downturn.
Laura Howard, spokesperson for Zoopla, said: “Despite evidence of a slowing housing market and ongoing political uncertainty, homeowners remain optimistic about the future of property prices.”
Where are homeowners most optimistic?
Homeowners in Yorkshire and Humber were most likely to expect house prices to increase in the next six months at 91%, followed by those in the north west at 90.5% and people in Scotland at 90.3%. People in Wales were also optimistic, with 89.5% anticipating further growth. In terms of actual price growth, those in Scotland are expecting the biggest gains of 5.5% in the coming six months. They are followed by homeowners in the north east at 5.4%, while people in the West Midlands and East Midlands think prices will rise by 5.1%.
Where do people expect to see house price falls?
Homeowners are least optimistic in London, where 32.8% predict house prices will drop during the next six months, losing an average of 6.7% of their value. Those in the south east are also downbeat, with 26.1% expecting price falls of around 6.1%. Despite this, there are still more people in these regions who expect the cost of property to continue rising than those who expect it to fall, with 67.2% of people in London and 73.9% of those in the south east expecting price rises. The biggest price falls were predicting in the north west, where those who think property values will decline expect them to be 8.5% lower in six months’ time.
What’s the background?
Zoopla’s latest UK Cities House Price Index suggests homeowners may be too optimistic, with this showing property price growth had slowed to just 1.7% in the 12 months to the end of April across the UK as a whole.
That said, homeowners in Yorkshire and Humber who are predicting price rises of 4.5% are not too wide of the mark, with property values in Sheffield currently rising at an annual rate of 4.4%, while in Leeds annual house price inflation is running at 3.5%. It is also no surprise that people in London are the least confident, with property values in the capital falling by an average of 0.5% during the past year.Howard points out that even if consumers’ forecasts fail to prevail, sentiment still plays a crucial role in the health of the housing market.
She said: “A feeling of stability means buyers are more likely to start actively looking for their next home, confident that now is the right time to make a purchase. And, in turn, an active pool of buyers will encourage sellers to list their homes for sale. Measured confidence in the housing market is also more likely to see homes marketed at the right price which, by its nature, generates demand.”
Top 3 takeaways
Original content taken from Zoopla, which can be accessed here.