Most home owners still believe the value of their property has increased despite concerns after the Brexit vote, but enthusiasm may be falling.
Knight Frank’s latest House Price Sentiment Index found households in ten of the 11 regions covered believed prices increased in October.
The index found 18.4% of the 1,500 households surveyed across the UK said that the value of their home had risen over the last month, while 7% said that prices had fallen. This resulted in a HPSI reading of 55.7
It is the third consecutive month that the index reading has been above 50, which suggests home owners are feeling positive.
However, the 55.7 figure is down from the 56.9 recorded in September.
Looking ahead, the index figure for those anticipating prices increasing over the next 12 months fell from 64.7 to 62.9 in October.
Some 12% of households said they expected the value of their home to fall over the next 12 months, down from the 23% seen in the month after the Brexit vote. Just 18% expect a rise in prices, still some way below the peak of 30% back in May 2014, but still above the reading of 11.2% in July.
There were some good signs for future market activity with 6% of households planning to buy a property in the next year, up from 5.8% in September.
On a slightly longer-term basis, some 13% of households said they were planning to buy in the next two years. This figure rises to 24.5% for those looking to buy at some point within the next five years.
Tim Moore, senior economist at IHS Markit, which helps compile the research, said: “The key message from October’s survey data is that UK housing market sentiment has recovered strongly this autumn from the post-referendum jitters seen during the summer.
“There were signs of resilience across all UK regions, with households in the south of England most confident that property values will rise over the next 12 months.
“Lower interest rates and stable mortgage availability have acted as shock absorbers for household sentiment in recent months.
“However, expectations for house price growth are softer than in the first half of 2016, suggesting that affordability constraints and Brexit uncertainty are still putting the brakes on price momentum.”