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U.K. Homeowners More Upbeat About Property Values

A positive economic outlook and low mortgage rates have helped stabilize the housing market, expert says

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Homeowners across the U.K. feel more confident about their property value, according to the latest index measuring house price sentiment.

KATHARINA DERFLER/GETTY IMAGES
Homeowners across the U.K. feel more confident about their property value, according to the latest index measuring house price sentiment.
KATHARINA DERFLER/GETTY IMAGES

Homeowners across the U.K. perceive that their home prices rose in September, according to an index measuring household sentiment in the housing market there.

The House Price Sentiment Index (HPSI) for September, released Friday by global real estate consultancy Knight Frank and data firm IHS Markit, stands at 56.9.

This was the second consecutive monthly rise in house price sentiment following the Brexit referendum in June, and the largest month-to-month increase in the index in seven years. August’s reading was 51.4.

In July, the index dropped to 48.3, the first time it had fallen below 50 since February 2013. Any figure under 50 indicates that prices are falling, while a reading over 50 indicates that prices are moving upward.

MORE:Post-Brexit, U.K. Household Confidence Falls to Its Lowest Level Since 2013

More than one out of five of the 1,500 households surveyed said that their home value had risen over the last month, while 6.9% said that prices had fallen.

The strong home price sentiment is mirroring a broader pick-up in confidence after Brexit, said Gráinne Gilmore, head of U.K. residential research at Knight Frank. Initial data shows a continuing positive outlook for both employment and economic output in the U.K.

“The housing market is now entering the typically busier autumn season, with indications that activity is rising, especially in key urban areas,” she said in the report.

MORE:U.K. Residential Market Shows Signs of Stabilizing Post-Brexit

Although there is still uncertainty surrounding the next steps the U.K. will take to exit the European Union, “the fundamentals of the housing market remain unchanged, underpinned by limited supply and ultra-low mortgage rates,” Ms. Gilmore added.

The future HPSI, which measures what households think will happen to the value of their property over the next year, also rose in September to 64.7 from 58.3 in August.

Write to Fang Block at fang.block@dowjones.com