The Eurozone crisis has resulted in a sharp shift in public sentiment about property prices in the United Kingdom.

According to the October House Price Sentiment Index (HPSI) from London-based Knight Frank/Markit, the rate of home price declines increased in October, and prices are perceived to have dropped every month since July of last year. buy house in qatar

Nearly a quarter of the 1,500 households polled said their home's value had decreased this month, while only 7% said it had increased. The resulting HPSI reading of 42.1 is lower than the September reading of 44.7. Prices are decreasing if the number is less than 50.

Those in the public sector (40.7%) thought the value of their home had dropped more in the last month than those in the private sector (42.4%) or those who are unemployed (42.0).

Lower prices were registered in all areas, but those in London (46.4%) believed their home's value had fallen at a slower pace than those outside the capital. The West Midlands (36.8) and Wales (36.8) saw the steepest drops (37.6).


Highlights from the October study

House prices in the United Kingdom are thought to have dropped for the 16th month in a row in October, and at a much faster pace than in September.

Prices are expected to decline the most for households earning between £15,000 and £23,000 in the coming year, whereas prices are expected to increase modestly for those earning more than £58,000.

Workers in the public sector are the most pessimistic about the housing market, anticipating larger price drops than those in the private sector or those who are unemployed.


House price forecasts

The future HPSI, which estimates what homeowners expect to happen to the price of their home in the next 12 months, fell to 47.7 this month from 53.6 in September. Since May 2011, this is the lowest reading.


Perspectives on the Area

In the coming year, households in eight of the 11 regions expect prices to decline, the highest proportion of regions with a pessimistic outlook since May of this year. The North East (39.8) is expected to see the most drops, followed by the South West (42.1) and Yorkshire and the Humber (39.8). (42.5).

Just three regions expect house prices to rise in the coming year: London (52.7), the East of England (52.1), and the South East (53.3), which has the most positive households of all regions, despite a drop from 59.0 in September.


Variations in the household

Homeowners are far more pessimistic about the prospects of housing prices than renters.

Mortgage borrowers (46.2%) expect rates to decline over the next year, down from their optimism in September about price increases (53.3). Many who own their home outright are even more pessimistic (43.5), predicting that their house price will fall rather than rise for the 15th month in a row. Those renting from private landlords (52.8%), on the other hand, still expect prices to increase, though at a slower rate than in September (56.6).

The brief period of optimism among public sector staff for potential price stability, which began in September, ended this month, with the reading dropping from 50.3 to 42.4, the lowest reading since January of this year and the second lowest reading in 212 years. The difference in outlook between government employees and their private-sector counterparts (48.6) is the widest since the index started in early 2009. And those who are not working (49.3) because they are elderly or unemployed are more optimistic about the future of their home prices than public sector employees.

Only households earning more than £58,000 a year expect their home's value to increase next year. Prices are expected to fall for all households with lower incomes, with those earning between £15,000 and £23,000 expecting the steepest drops (43.8).



Gráinne Gilmore, head of Knight Frank's UK residential analysis, tells the World Property Channel, "A raft of negative economic data indicated that the UK was struggling to recover from recession, prompting the sudden turnaround in sentiment for future house prices. While the Bank of England's renewal of quantitative easing will reassure homeowners that their mortgage rates will remain low for the foreseeable future, it also indicated that the economy is still struggling, denting consumer trust across the UK.

The broad disparity in sentiment between public and private sector workers also highlights another current factor affecting the housing market: public sector budget cuts, which have resulted in job losses in many communities, especially in the North of England.

However, there are rays of hope emerging from other sectors of the economy, with those in banking, industry, and manufacturing among the most positive about potential house price growth.

However, the negative data indicates that the market's current broadly stable prices will be difficult to sustain in the coming year."

"Weak labor market conditions and heightened worries about the economic outlook took their toll on house price expectations in October, as sentiment dropped back to its lowest level since the start of the summer," said Tim Moore, senior economist at Markit.

This is the first survey of house price sentiment since the Bank of England launched its new round of quantitative easing, and it indicates that the turnaround in house prices that followed the first round of quantitative easing in early 2009 is unlikely to be repeated "

Instead, the most recent data point to a growing geographic disparity in property price patterns. Prices are expected to rise in London and the Home Counties, despite negative sentiment elsewhere.

"House price sentiment in London has been positive for most of the last two and a half years, an unrivaled record of stability as compared to the rest of the UK."

Meanwhile, as shown by the survey-record difference between public and private sector house price sentiment in October, areas with high concentrations of public sector employment are more likely to see property price declines."

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