· Households in all UK regions perceive that the value of their home rose in March
· Londoners perceived the strongest rate of price growth over the course of the month, followed by those in the South East
· Households in all UK regions expect house prices to rise over the next 12 months, with the strongest growth expected by households in the South East
· Mortgage borrowers were the most confident about future price growth, followed by those who own their home outright
Gráinne Gilmore, head of UK residential research at Knight Frank, said:
“The fundamentals for the UK housing market remain steady, especially around mortgage costs which remain at record lows.
“The imbalance between demand and supply of housing is also underpinning house prices. The delivery of new homes remains some 30-40% below the levels needed to start to address the annual shortfall of housing in the UK.
“There have already been several large targeted government policies to try and boost development and ease the path of first-time buyers – and it is notable the future sentiment reading for 25-34 year olds is the highest it has been for 15 months.
“As reflected in the index, the sound fundamentals of the market will combine to support overall prices in the coming year, but as the index also reveals, the market will continue to be ‘multi-speed’ across regions and price bands.”
Tim Moore, senior economist at Markit, said:
“The latest survey is a clear signal that UK house prices have stayed on an upward trajectory throughout the first quarter of 2016.
“One of the factors supporting price sentiment seems to be the expectation that interest rates will remain ultra-low for longer, and this belief has become more widespread so far this year.
“Households’ current price sentiment is stronger now than at any time over the past 17 months, but the economic landscape is not lacking in potential headwinds for buyer confidence.
“In particular, UK pay growth is uneven at best and slowing at worst, while at the same time some lenders have started to lower their maximum loan-to-income ratios. Stretched affordability is of course never far from any discussion of
UK house prices – but it could bite harder now for first time buyers, especially in London and surrounding hotspots.”