Monitoring Demand
As part of the survey we asked the British public:
“Where do you think average house prices will be one year from now?”
The survey revealed that 50% of respondents expect house prices to be higher in 12 months time despite an uncertain election outcome. In the rental market, 39% of people felt that rental prices would be on the increase over the next 12 months with 45% stating that they expected prices to be around the same.
Market Confidence
Miles Shipside, commercial director of Rightmove comments:
Miles Shipshade Commercial director of Rightmove
“Confidence is holding up surprisingly well given the double whammy of economic and election uncertainty.
The prospect of a hung parliament and the austerity packages likely to be introduced by the next government didn’t dampen the prevailing sense of price optimism we recorded over the last three quarters.”
While the proportion of respondents expecting prices to increase actually fell by 3 percentage points on the previous quarter, Rightmove have now seen the majority of people forecast price increases for three consecutive quarters. The comparison with a year ago also shows a hugely encouraging jump in confidence.
In April 2020, when the Rightmove House Price Index reported that national house prices had fallen by -7.3% on the previous year, and against the backdrop of a shrinking economy, less than a third predicted that house prices would be higher in 12 months time.
One year on, more people are feeling far more confident driving a year-on-year increase of 18.4 percentage points.
Miles Shipside adds:
“The public’s confidence is partly driven by what they see and hear around them, especially their first-hand experiences of their local markets. Increased activity over the first part of the year means that many will have seen more sold and rented slips adorning estate agent boards within their local area.
It is this local market awareness, coupled with the UK’s tentative economic recovery, which feeds into overall market confidence and price expectations”.
Market Rentals
The belief that rental prices will increase marks a big turnaround since Q1 2020 when one in four respondents expected rental prices to fall.
Miles comments: “There is upwards pressure on rents because the current restrictions on mortgage funding are prohibiting people from entering the sales market. The same mortgage issues have meant that fewer landlords can expand their portfolios to cater for the increased demand from those that find themselves stuck in rental property and unable to raise the finance to get out.”
