A perceived reduction in home values was reported by 17% of households, versus around 8% indicating a rise. At 45.4, the resulting HPSI figure is down from March’s 20-month high of 46.6.

Any figure under 50 indicates that prices are falling, and the lower the figure, the steeper the decline. Any figure over 50 indicates that prices are rising.

As was the case in March, lower property values were signalled in ten of the 11 regions in April, according to the survey of 1500 households. Sentiment was weakest in the North East (39.1) and Wales (39.2), which both recorded accelerated price falls. London continued to buck the trend, with those living in the capital reporting that the value of their home had risen for the second month running, albeit at a slower pace than in March (53.6, down from 55.1).

The future HPSI, which measures what households think will happen to the value of their property over the next year, remained in positive territory for the third consecutive month in April, posting only just below March’s 20-month high. Approximately 29% of households anticipate a rise in the value of their home over the next 12 months, compared with 21% expecting a decline. The resulting index reading is 54.0.

Positive expectations for house prices were recorded in nine of the 11 regions in April, up from just six in March. Respondents in London remain by far the most upbeat (62.2), followed by those in the South East (56.4) and East Midlands (55.7). Only in the North East (45.1) and Wales (48.0) are house prices expected to decline.

Sentiment regarding future house prices is broadly similar in the private (54.3) and public (55.0) sectors, with the latter recording marginally stronger optimism (the first time this has been the case in two years).

Respondents working in the Media/Culture/ Entertainment sector forecast the sharpest rise in the value of their home (68.5). Expectations are also strong in the IT/Telecoms category (59.2). The weakest sentiment is in the Retail sector (50.1), where survey participants expect house prices to broadly stagnate, although this represents an improvement on the previous six months where price falls were predicted.

Increased house prices over the coming year are forecast by homeowners and renters alike (in addition to those living rent-free at home). Mortgage-holders anticipate the strongest rise (55.3), followed by those renting privately.

Grainne Gilmore, head of UK residential research at Knight Frank, said: “There is little surprise that outside London, the current view of households regarding the movement of their house price movements remains negative – economic news continues to deliver at best a mixed picture of the fortunes for the economy.

“The more interesting issue is the continuing view that house prices are likely to rise over the next 12 months.

“This confidence about future market movements is a welcome sign for the market – especially the breadth of confidence across the UK, with all but two regions expecting to see price growth in the near future.”

Its 2012 Moving Home Survey revealed that only 12% are thinking about moving home or getting on the housing ladder.

Of those householders not looking to move, 61% of people aged 55+ said it was because they were happy with their current property compared to just 28% of those aged 34 and under.

While the contentment felt by older homeowners may continue to limit the amount of available housing stock, the stagnation in the market is likely to be prolonged by the perceived financial obstacles facing younger Britons.

Of those people aged 34 and under who are not planning to buy or sell a property, the main reasons include having an insufficient deposit (29%), concern about not getting a mortgage (15%) and fears about employment prospects (14%). While financial concerns were a factor for many young people staying put, 10% said they simply did not wish to own a home, suggesting a reverse in the home ownership aspirations of this age group.

The main reasons people aged 55+ are thinking of selling a property are to downsize (36%) and release some, or all, of the equity held within it (33%).

The key motivations for younger people (aged 34 and under) wanting to buy or sell include to get on the property ladder (31%) and the need for more space/upsize (27%).

According to region, selling homes will be especially popular in north-west England, where 8% of people are hoping to move home. Buying homes will be popular in Scotland (9%), London (10%) and south-east England (9%). Purchasing buy-to-lets looks set to be more common in north-west England (4%), the West Midlands (3%) and London (4%).

But overall, the housing market looks set to be the most buoyant for Londoners, where 18% of people are thinking of buying and/or selling property of one sort or another in the next six months.

Peter Dockar, HSBC Head of Mortgages, said: “Our research suggests that the current economic climate is of particular concern to younger people who either want to get on the housing ladder or move on to a larger property.

“All this supports the prediction of the Council of Mortgage Lenders that lending will fall this year.”

Some Five percent of households related that the value of their home had risen since December, while around 19% reported a fall. The ensuing HPSI figure of 43.2 is down from 43.3 in December, but well up from the reading of 38 recorded in January 2011.

Any figure under 50 suggests that costs are falling, and the lower the figure, the steeper the fall.

Property values were perceived to have fallen in all eleven regions this month, according to the survey of 1500 homes. The sharpest declines were in the North East (38.6) : and Wales (40.2). The least claimed falls were in London (47.7), but this is still the lowest reading for the capital in 3 months.

There was an outstanding deterioration in sentiment among people who own their own homes outright. The HPSI reading for this group was 36.4, down from 40.8 in December, and matching the lowest reading in eight months.

Those working in the private sector (44.9) : were a touch more upbeat than those working in the general public sector (42.1) : about the rate of decline in their place costs.

The future HPSI, which measures what households think will happen to the value of their property over the following year, stayed below, but close to, the Fifty no-change mark in January for the second month at 49.3, down from 49.7 in December. This is the 1st time the index has stayed below Fifty for more than a month since May last year.

Households in only three of the eleven regions expect the value of their homes to rise over the following year : London ( 57.8 ), the South East (54.3) : and Scotland ( 52.9 ). Prices are predicted to fall in all other regions, with the most important falls predicted in the North East (41.7) : and Wales ( 42.6 ).

Sentiment about future home price movements has dropped abruptly among those working in finance and business services. January’s reading of 43.1 is down from 58.7 in December and marks the lowest reading since this index began in April 2009 just as the recession started to ease.

It is also the lowest reading across all zones in January, stopping the trend over the last half a year when workers in this sector anticipated the biggest rise in house prices.

However there was an increase in confidence over house prices among those working in the construction sector, with a reading of 55.4, up from 44.5 in December.

Mortgage borrowers (51.6) : and renters (50.3) : expect costs to rise over the next year, but those who own their home outright (47.2) : expect a fall in prices.

The most important deterioration in expectations is among people who live rent-free at home. January’s reading of 43.9 is down from 56.1 in December, and is only the 2nd time the reading has been below the 50 no-change mark in the last eight months.

Grainne Gilmore, head of UK residential research at Knight Frank, said : “There is tiny New Year cheer among households this month, maybe reflecting the wider economic doubt throughout the UK, with concerns the country could be back in recession only exacerbated by worrying unemployment figures released earlier in the week.

“The pointed reversal in sentiment about future home prices among those working in finance and business services is also proof of the toll being taken on that sector at present as many banks cut thousands of roles. It is striking this unexpected fall in confidence coincides with the traditional ‘bankers ‘ bonus ‘ season.

“The regional differences in expectations for house prices also highlight the North-South divide which is starting to become ever more evident in the housing stats. With the single exception of Scotland, where households also expect costs to spring back over the next year, homes in London and the South East are far more upbeat than those some place else in the country.

The OECD predicted the UK economy would shrink in the fourth quarter by 0.02% and by 0.14% in the first quarter of next year.

The outlook is much worse for the euro zone where the OECD’s predictions are -1% in Q4 and -0.4% next. The global economic growth forecast has also been marked down to 3.8% this year and 3.4% next year.

Perhaps most alarming, the OECD said it believed that a “negative event” in the euro zone could cause a global contraction.

The OECD represents wealthy countries such as those within the euro zone, the US and Japan.

Minutes from the MPC’s latest meeting (earlier this month) highlighted that all nine members of the MPC backed maintaining the target level of quantitative easing at £275billion.
Maintaining interest rates at 0.5% was also a unanimous decision.
The Bank’s November minutes said: “While the worst risks had not so far crystallised, the threat of their doing so had increased, exacerbating the already severe strains in bank funding markets and financial markets more generally.”

They added: “Some members noted that the balance of risks to inflation in the November Inflation Report projections meant that a further expansion of the asset purchase programme might well become warranted in due course.

”Some other members judged that the risks to inflation around the target were more balanced.”


The RICS’s new report, out this morning, says that the number of sales per estate agency member has slipped to an average of 14 in the three months to the end of August – taking transaction levels to a 26-month low.

The RICS asked its members why they felt sales levels are so low.

The most commonly cited reason was general economic uncertainty (79%). In addition, nearly three-quarters of surveyors (70%) felt a lack of mortgage finance was impacting negatively on transactions, and 40% felt that fear of price falls was keeping buyers and sellers out of the market.

New buyer inquiries also fell back in August, and surveyors reported that house prices dipped during the month, other than in London.

The majority also expected house prices to fall further.

RICS housing spokesperson Alan Collett said: “For the time being, our indicators suggest that demand for homes remains broadly steady, albeit at relatively low levels, despite the renewed bout of economic gloom.

“However, the risk is that the worsening economic picture will gradually begin to have a more material impact on sentiment and discourage potential house purchasers even where mortgage finance is available.”

Agent Tim Brown, of George F White in Bedale, North Yorkshire, said: “Property must be priced realistically if it is going to sell this year or in the future. The sooner vendors come to terms with this the better. Too many agents continue to set unrealistically optimistic guide prices in order to gain instructions, but are doing their clients no favours by doing so.”

Another agent, Simon Hickling, of Maxey & Son in Wisbech, Cambridgeshire, said: “Mortgages are still very difficult to obtain, leading to a lack of first-time buyers: we have not had one for over 12 months.”

A separate report from the Home website paints a picture of a lucklustre housing market going into autumn, with asking prices falling back slightly and houses typically taking 120 days to sell – 15 days longer than last September.

The site, which lists properties taken from virtually all the property portals and websites in the UK, warned of slides in property prices, trapping more people in negative equity.

It said: “The consequences for the UK property market are that fewer and fewer properties will change hands.

“Even those people who must move through work, divorce or a growing family will choose to rent out their property rather than accept the financial loss required to make a sale.”

Mr Dent predicts that countries worldwide will be affected by another financial crisis, commencing in Europe during the early part of next year, before rippling out to the USA, Asia and eventually Australia.

Speaking to the press in Australia, he said: “Australia is probably the best place in the world to survive this, but we do think Australia will not escape as well as it did from the last crisis [in 2008].”

He continued: “People in places like Sydney or Tokyo or Miami say, ‘Hey, real estate can never go down here, we’re a great place, everyone wants to move here, there’s not much land for development’, and what I say is that is exactly the kind of place that bubbles.

“Outside Hong Kong and Shanghai, Australia is the most expensive real estate market in the world compared to income,” Mr Dent added.

Dent, who claims to have called the current USA property crash 20 years ago, believes that global property prices will fall due to a general cut in consumer spending.

The only region in England and Wales to experience an increase in its average property value over the last 12 months is London with a movement of 1.3%.

The South West experienced the greatest monthly rise with a movement of 2.2%. The North East experienced both the greatest annual price fall with a decrease of 8.8% and the most significant monthly price fall with a movement of 2.3%.

The most up-to-date figures available show that during May 2011, the number of completed house sales in England and Wales decreased by 10% to 46,870 from 52,170 in May 2010. The number of properties sold in England and Wales for over £1million decreased by 44% between May 2010 and May 2011, from 464 to 262.

Huge deposits, combined with high house prices and strict lending criteria, have sent home ownership into decline in recent years and the downward trend will continue for the foreseeable future, the National Housing Federation’s independently-commissioned forecasts predict.

The Federation, which represents England’s housing associations, warned the housing market will be plunged into an unprecedented crisis as it forecast steep rises in the private rental sector, huge social housing waiting lists, and a house price boom – all fuelled by a chronic under-supply of homes.

• In England, the proportion of people living in owner-occupied homes will fall from a peak of 72.5% in 2001 to 63.8% in 2021;
• In London, the majority of people living in the capital will rent by 2021 with the number of owner occupiers falling from 51.6% in 2010 to 44% by 2021;
• The North East will be the only English region to see any increase in owner occupier numbers over the next decade, rising marginally from 66.2% to 67.4%;
• The average house price in England will meanwhile rise by 21.3% over the next five years from £214,647 in 2011, to £260,304 in 2016, according to Oxford Economics, who were commissioned to produce the forecasts.

For the hundreds of thousands of people locked out of the housing market, the options open to them will be limited and increasingly expensive.

Average rents in the private sector are forecast to increase sharply by 19.8% over the next five years fuelled by high demand and a shortage of properties. Oxford Economics predicted that would mean rents would increase on average in England from £486 a month in 2011 to £582 a month in 2016, meaning tenants would be paying £1152 more a year in total.

Around 4.5 million people are currently stuck on social housing waiting lists – but only those in the most desperate of circumstances have a realistic chance of being allocated a home.

At the heart of the problem remains a chronic under-supply of new homes. In 2010/11 just 105,000 homes were built in England – the lowest level since the 1920s. Plans for more than 220,000 new homes have been abandoned by local authorities since the Government announced the abolition of regional house building targets last year.

The Government’s latest projections suggest new households will form at a rate of 232,000 a year to 2033. Housing associations produced nearly half of all homes built in England last year and are on course to deliver 50,000 affordable homes a year – despite seeing government grants slashed by 63%.

The average number of sales per estate agent office in the three months to the end of July slipped to 14.2 the lowest level since June 2009. Unsold stock increased slightly, to an average of 70.

The RICS said big deposits required by banks are an obstruction for many would-be purchasers.

New instructions, which saw a slight upswing during the early part of the summer, dropped back in July.

The RICS said that with costs continuing to slide, it would seem that many potential sellers are reluctant to accept reduced selling prices, so are reluctant to enter the market.

London continued to go against the Nationwide trend as the only region to report price increases rather than falls. The capital also recorded the most powerful level of new customer inquiries, again outperforming the remainder of the United Kingdom.

Jim Barber of JB Property Solutions: “The UK house market continued to stall during July; prices edged lower and sales levels remained subdued. While the holiday season appears to have had some impact on the market, the continuous problem of inaccessible mortgage finance is still forestalling first-time buyers from gaining access to the market.

“Unsurprisingly, with prices continuing to fall, many would-be sellers appear not keen to lower their expectations and are hesitant to place their property on the market.”