The jump in optimism coincides with the launch of Help to Buy, the government’s multi billion pound mortgage support scheme, says the report compiled property firm Knight Frank and Markit, a leading economics consultancy.
The index report indicates that households perceive that the value of their home rose over the last month, the first time this has happened since June 2010.
In addition, the index also shows a surge in optimism over the future movement of house prices, signalling that households in every region expect the value of their home to rise over the next year.
Sentiment has been growing more positive in recent months, but April’s data marked a significant step change, with the future HPSI hitting a near three year high.
The Help to Buy scheme is designed to free up the mortgage market, and this was reflected in rising optimism over house prices seen among the generation of aspiring home owners, aged between 25 and 34. Likewise, there was an increase in optimism among those currently in the rental market. The HPSI has acted as a good forward indicator of price movements since its inception in 2009.
‘House price expectations have risen every month of 2013 so far, which marks the longest uninterrupted period of improving sentiment since the survey began over four years ago,’ said Tim Moore, senior economist at Markit.
‘April’s survey provides a snap shot of how the Budget has influenced households’ perceptions of their property values. In terms of the price outlook, households reported the greatest post Budget jump in sentiment since the stamp duty holiday extension in 2009. The latest survey suggests the Help to Buy scheme has boosted house price sentiment, alongside a continued improvement in mortgage availability and more concrete signs that current values are on the up,’ he explained.
However, a mixed picture persists across the UK regions. The number of London households expecting a year ahead rise in their property value outnumbers those that anticipate a drop by five to one, against a ratio of around four to one in the South East and three to one across the UK overall.