People have a positive outlook on house prices over the medium and long term, but are not so upbeat for the next 12 months.
That is the finding of the latest London School of Economics survey of House Price Expectations.
The survey, which gauged people’s feelings on the UK housing market over the next 12 months, five years and ten years, was sent to John D Wood’s current and prospective customers, most of whom are interested in property within central London.
Respondents were asked to think about a hypothetical house in central London worth £1m and to give their view on whether values will go up or down over 12 months, five years and ten years, ignoring inflation.
Some 43% of respondents were ‘certain’ house prices will rise over the next ten years, 26% were ‘certain’ they will go up over the next five years, but only 8% were ‘certain’ they will rise over the next 12 months.
People currently renting had a more pessimistic view on house price increases than owner occupiers.
Renters see house prices decreasing by 1% over the next 12 months while home owners perceive a rise of 3%. Tenants think prices will rise by 11% in five years, against 18% from owner occupiers. In ten years’ time, tenants believe prices will have gone up by 26%, while owner occupiers think values will have gone up by 37%.
Respondents were able to post comments as part of the survey: the most frequent was that the London housing market is different to the rest of the country due to lack of supply, the prevalence of international purchasers and bankers with bonuses.
Many added that London’s property market is a series of micro markets.
Meanwhile, agents are saying that the housing market in central London will continue to suffer from a serious lack of stock until at least May.
Ed Mead, director of Douglas & Gordon, said: “Vendors are choosing to launch their property after the April and May bank holidays and the Royal wedding.”
But he also confirmed that there has been a ‘flurry’ of purchasers hurriedly offering on £1m-plus properties to beat the April 6 Stamp Duty deadline.
He said: “Whilst this has helped the number of sales in the first two months of this year, we’re preparing for stock levels and interest in properties over the £1m mark to be less in the second half of 2011.”
The average price of a three-bed property sold by Douglas & Gordon is over £1.1m, and the average price of a four-bed property sold by the firm is nearly £1.7m.
Comments
Well I think this research is mainly for investment purpose as all investor would hope thats somehow are get the house at good price and within coupe of years the price of the house increase and therefore , we earn the differences .
What a pointless poll. It stands to reason that renters would assume falls and home-owners would assume rises (over 12 months) only by virtue of their respective cirmcumstances.
Still, is it just me but their seems to be a swathe of articles in the press trumpetting the resilience of the London market - smacks of desperation to me. London wasn't immune in the 90s, it wasn't immune in 08/09 and it sure as heck won't be immune in the future.
RE "House buyers hopeful over London house prices rising"
Sounds a stupid line. I am a potential first time buyer living in London and I am hoping prices will fall not rise. What kind of idiot wants prices to rise whilst buying.