Despite a slowdown in the growth of house prices, confidence remains high among homeowners, with an average of 81 per cent of people predicting an average price increase of 4.8 per cent in their area over the next six months, according to a recent report from Zoopla.
Regionally, as many as 91 per cent of homeowners in Yorkshire and Humber predicted a rise in house prices in their area. Scotland followed as the third most optimistic region, with 90 per cent of respondents expecting an increase, according to the report.
London was marked the least confident region, with only 67 per cent of homeowners expecting price growth. The South East and North East also showed weak confidence, with 74 per cent and 78 per cent anticipating increases respectively.
House price declines
Homeowners in London predicted a major decline in price growth rates, with 32.8 per cent expecting house prices to lose an average of 6.7 per cent of their value in the next six months, according to Zoopla’s report.
The decline in confidence was echoed by property values in the capital falling by 0.5 per cent on average, during the past year.
The biggest price decline was predicted in the North West. Out of those who thought property values would fall, an average decline of 8.5 per cent was expected over the next six months.
In terms of house price growth predictions, those in Scotland expected the biggest rise of as much as 5.5 per cent on average, in the next six months. Respondents in the North East followed, predicting an average price increase of 5.4 per cent in their area during the same period.
Meanwhile, those in the West Midlands and East Midlands thought prices would rise by 5.1 per cent.
Slowdown in the housing market
House price growth slowed to 1.7 per cent across the country’s 20 major cities in the 12 months leading up to April. This figure was upgraded to growth of 2.2 per cent when evaluating the UK as a whole, according to the recent UK Cities House Price Index from Zoopla.
Laura Howard, spokesperson for Zoopla, commented: “Despite evidence of a slowing housing market and ongoing political uncertainty, homeowners remain optimistic about the future of property prices.”
Ms. Howard pointed out that even if homeowners’ forecasts fail to prevail, sentiment still plays a crucial role in the health of the housing market.
She explained: “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.”
Ms. Howard concluded that the more measured confidence observed in the housing market is also more likely to see homes marketed at the right price, which, by its nature, generates future demand.