Homeowners across the U.K. continue to show confidence in the value of their properties, shrugging off uncertainties around the country’s Brexit strategy, according to a report released Friday.
In November, close to 17% of the 1,500 households surveyed said that the value of their home had risen over the last month, while 6.3% said that prices had fallen. This resulted in a reading of 55.3 for the House Price Sentiment Index (HPSI), compiled by Knight Frank, a real estate consultancy, and IHS Markit, an information provider.
Although most households are still optimistic about home prices, November’s reading is a slight decrease from the 55.7 recorded in October and is the second consecutive month during which household perceptions eased, which mirrors the wider trend in house price growth post-referendum.
"This chimes with the increased economic uncertainty as the U.K. starts to negotiate its way out of the E.U.," said Gráinne Gilmore, head of U.K. residential research at Knight Frank.
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However, she pointed out that opinions on the housing market are also formed at a local level. In many cases, markets are characterized by a lack of supply of homes to purchase, which is underpinning pricing and boosting homeowners’ perception.
This was the fourth consecutive month that the reading has been above 50 following the index’s post-referendum low of 48.3 in July. The index reached a peak of 63.2 in May 2014.
Any figure over 50 indicates that home prices are rising, and the higher the figure, the stronger the increase. Any figure below 50 indicates that prices are falling.
The future HPSI, which measures what households expect will happen to the value of their property over the next year, rose in November to 64.6 from 62.9 in October.
"The influence of supply constraints on house price expectations appears evident in latest figures," said Tim Moore, senior economist at IHS Markit. Most notably, people living in London and its commuter regions were far more likely to anticipate higher property values in 2017 than the rest of the U.K.
Write to Fang Block at fang.block@dowjones.com