Home owners in UK highly optimistic
This is the fourteenth consecutive month that households reported a rise in the value of their property. A record 30.6% of the 1,500 households surveyed across the UK said that the value of their home had risen over the last month, compared to just 4.3% who reported a fall.
This gave the HPSI a new record high reading of 63.2, up from the previous record high of 62.7 in April 2014.
Any figure over 50 indicates that prices are rising, and the higher the figure, the steeper the increase. Any figure below 50 indicates that prices are falling.
The new high means that households are more confident that the price of their property is rising than at any other time since the index began in early 2009.
Households in all 11 regions covered by the index reported that prices rose in May, with those living in London perceiving that the value of their home had risen at the strongest rate (69.9), followed closely by households in the South West (69.2).
While Londoners were the most confident that the price of their house rose in May, this month's index reading was lower than the record of 74.9 in April. The future HPSI, which measures what households think will happen to the value of their property over the next year, also reached a new high of 75.1 this month, marginally up from last month's previous record of 75.0.
More than a half of respondents said they expected the value of their home to rise, with only 5.7% anticipating a decline. Households in every region expect the value of their home to rise, with record highs reached in the East of England (79.7) and the South West (79.3).
In London and the South East expectations moderated from recent peaks. Over-55s were the most confident about future house price rises (80.1). Given that levels of home ownership are higher among those aged 55 and over, those who own their home outright are the most confident that prices will rise over the next year (81.1) followed by mortgage borrowers (79.4). Some 6.5% of UK households plan to buy a property in the next year, up from 5.1% in April.
A further 21.6% of households say they plan to purchase a property within the next five years, and 25.7% indicate they want to buy a house or apartment in more than five years' time. Around 18% of households say they have no plans to buy at any stage and 28% of households are undecided. ■