Hefty price rises are predicted for the property market over the coming months.
A home moving comparison website has forecast that house prices will rise an extraordinary 9% between now and August, while Zoopla says that home owners believe prices will rise almost 5% in the next six months “ despite evidence to the contrary.
Zoopla surveyed just over 2,000 of its registered users to give their opinions on house prices. Eight out of ten expect property values to rise in their area, with the most confident areas in the north “ where 91% predict increases. Even in the least confident area, London, 67% forecast rises.
The optimism is despite slowing price growth, with annual house price inflation dropping to 1.7% across major cities in the 12 months to April. In London house prices have actually dropped by 0.5% over the year. Laura Howard, spokesperson for Zoopla, said: Despite evidence of a slowing housing market and ongoing political uncertainty, home owners remain optimistic about the future of property prices. Consumer sentiment plays a crucial role in the health of the housing market. However, she added: Vendors fuelled with optimism for house price growth will need to listen carefully to the advice of their estate agents. Consumer positivity must be channelled to ensure that pricing is correct from the outset.
Meanwhile, the yet more optimistic house moving website, Reallymoving, is forecasting a 9% rise in an even shorter timeframe. Reallymoving, which has just released its inaugural house price forecast, says that it is able to provide an accurate forecast three months ahead of completions.
CEO Rob Houghton said: Prices agreed this spring will show in Land Registry data in the summer. However, our customers registering for home move services as soon as their deal is agreed are giving us unique insight into what lies ahead for the housing market.
Our forecasts suggest that sellers are growing tired of the 'wait and see' approach and once the Brexit deadline passed at the end of March, with no further clarification, sellers decided to press ahead with their move.
This new buyer demand and a continued shortage of quality housing stock is on course to drive strong price growth between May and August, with particular surges in regions benefiting from strong demand such as the north-east and the south-west, where affordability remains attractive and wages are rising.
Annually, average UK prices have been falling since the start of the year, but in June we can expect prices to see a return to positive growth with a rise of +1% year on year, followed by 0% change in July.
This suggests that a strong market performance over the spring will see prices make up the value lost in the first part of this year and are set to recover to 2018 levels this summer.
There is considerable pent up demand in the market following three years of uncertainty and with many doubting that Brexit will be resolved any time soon, people are increasingly making the decision to move on regardless.
Separately, referencing firm HomeLet reports that new rents last month rose 1.6% on May last year, to an average of £934 per month. Rents outside London are up 1.7%, and within London up 1%. In London, the average rent is now £1,602, and outside London £776. Rents have risen in every region apart from Yorkshire & Humberside and the north-east.