UK Housing
Rows of houses are seen in High Wycombe Reuters

The house price sentiment for UK has risen back above its post-referendum high in February, showing that Brexit-related worries for the sector have receded, Knight Frank and IHS Markit said in a survey report on Friday (Feb 17).

The HPSI reading came in at 57.5, up from 55.8 in January, marking its seventh consecutive rise. Any figure over 50 indicates that prices are rising, and that below 50 indicates that prices are falling.

February's reading was the highest achieved by the index since the UK's referendum on EU membership, and is the first indication of household sentiment since the publication of the Government's Housing White Paper, the report noted.

"UK households are gaining confidence about the outlook for their property values over the course of 2017, driven by the improved economic backdrop, resilient labour market conditions and a continued boost from ultra-low mortgage rates," said Tim Moore, senior economist at IHS Markit.

"Brexit-related anxieties appear to have receded among buyers."

Respondents in ten of the 11 regions covered by the index believe the value of their home increased, led by those in London and households in all the regions expect the value of their home to increase over the next 12 months, the research house said.

Experts say that the health in the housing sector also proves that the overall economic recovery is gaining additional momentum.

"The rise in household sentiment on house prices comes as a less cloudy picture of the UK economy starts to emerge. Earlier this month the Bank of England revised up its forecasts for GDP growth, and although the country still has to negotiate a withdrawal from the EU, the immediate economic conditions remain positive," said Gráinne Gilmore, head of UK residential research at Knight Frank.

Concerns

As per the survey, the housing price trend is upward but the strength of rising is far below the levels seen some three years ago, showing that there is way to go to watch up with its potential growth.

"While February's reading was at its highest level since the result of the EU Referendum, it's worth noting that it remains comfortably below its peak of 63.2 reached in May 2014 mirroring the moderation in price growth which has been seen since then," the IHS/Markit survey said.

Also the survey revealed large amount variation among cities in the trend.

Households in London (65.2) and the East of England (62.0) reported the biggest rise over the course of the month. They were followed by those in the South East (60.3) and the West Midlands (57.6).

Households in Wales reported a slight fall in prices over the course of the month (47.9).

Outlook

The future HPSI, which measures what households think will happen to the value of their property over the next year, rose in February to 67.5, up from 65.5 in January and from 62.3 in December.

That too came firmly below its peak of 75.1 achieved in May 2014 and varying among regions.

Those in the South East (76.4) was the most confident that prices will continue to rise followed by those in the East of England (74.5).

Households in Wales are expecting the smallest gains (58.2), while mortgage borrowers (73.6) were the most confident that prices would rise, followed by those who own their home outright (69.7).