The majority of property owners in the UK believe that their home values will rise in the next six months, according to the latest quarterly survey by a leading on-line real estate market resource.
Some 79% of 6,682 property owners quizzed for the survey were confident about the short term future of the real estate market and agreed that prices will go up between now and the Spring of 2010.
The survey for Zoopla.co.uk also found only one in ten, some 11% are expecting that property values will fall over the next six months. Overall, those surveyed predicted average house values in their area will increase 5.4% over the next six months, but are even more optimistic about the prospects for their own homes, which they believe will rise by 5.8%, faster than their neighbours’.
Property transactions show an 80% correlation to the Zoopla.co.uk confidence index, and lag movements in confidence by around three months, indicating that rising confidence will push transaction volumes higher in the coming months, the company said.
The optimism though among property owners is not shared by renters with some 42% of renters surveyed thinking that house values in their area will either remain unchanged or decline in the coming six months.
Renters are also least hopeful about the availability of mortgage finance with over three-quarters of renters, 76% saying it is no easier to obtain a mortgage now than it was three months ago.
Overall, property owners believe that the clearest sign of a property market recovery is seeing the level of transaction activity in their area increase from the recent lows.
‘Optimism in the property market is climbing back to levels not seen since before the credit crunch began in 2007 and is four times higher than it was in the depths of the decline earlier this year,’ said Alex Chesterman, CEO of Zoopla.co.uk.
‘Confidence drives transaction volumes, which in turn drives house prices. But with lending remaining constrained, transaction volume cannot recover as strongly as demand suggests it should, and the inability of first-time buyers to get a toehold on the housing ladder is the biggest single risk to the housing market recovery,’ he added.