A recent opinion-based report out of Knight Frank/Markit indicates optimism in the UK housing market is in quite a trough.  More than 1500 homeowners responded in the study concerning how they feel about the direction of home prices in the next twelve months.  With one of the lowest readings this year, only 6% reported a positive move in the value of their home.  On the other hand, more than 15% reported the value of their home had deteriorated.

Surprisingly, homeowners in the city of London had perceived drops of value in their property.  This occurred for the first time since February of this year. 

A significant amount of those responding (24%) expect a rise in the value of their home in the next year.  Slightly less than 24% expect a drop in value over the same time period.  Less than 30% of all regions combined expect a price rise during the month of October.

The chief economist of Markit, Chris Williamson, commented on the level of optimism residing within the housing market, saying: “The drop in sentiment about house prices over the coming year is a surprise, and suggests that the Government’s Funding for Lending Scheme, which - according to the lenders – reportedly resulted in a marked increase in the availability of finance for mortgages in the third quarter, has yet to filter down to improved optimism about the housing market. Instead, it seems that people have become more nervous about the economic and housing market outlooks for the coming year.

“Once again, the economic recovery appears to be missing the vital ingredient of confidence. The future outlook is clouded by confusion over the current health of the economy and the appropriate policy response, as well as worries about the impact of austerity and the Eurozone’s crisis.”