Householders thought the value of their homes fell in January from the previous month, although they also think prices will improve in future, with sentiment about London – home to internationally sought-after prime residences – leading the way, according to Knight Frank, the global property consultants.

Knight Frank/Markit’s House Price Sentiment Index signals that average house prices fell for the 31st consecutive month in January. The proportion of homeowners reporting that the value of their home had risen was 7.7 per cent, the same as in December, while 13 per cent said the value of their home had fallen, compared to 14 per cent last month.

These percentages produced an HPSI reading of 47.6, matching the reading in November, and which together are the highest readings since July 2010, indicating that house prices fell more modestly during these months than any time over the last two and a half years. Any figure under 50 indicates that prices are falling, and the lower the figure, the steeper the decline; a figure over 50 indicates that prices are rising.

The future

The future HPSI, which measures what households think will happen to the value of their property over the next year, rose in January. The overall index reading for the UK was 54.5, up from 53.1 in December. On a three-month average, the future HPSI in January was 54.5, up from 53.2 in December and the highest since August 2010.

There are different outlooks according to region. Londoners (65.5) led the way: they expect the biggest lift in the value of their homes over the next 12 months than at any time since June 2010.