Six times as many people believe their district is up and coming compared to those who think that it is doing less well than other areas.
People put local factors above macroeconomic ones to explain their view that house prices are on the up, clearly regarding their own area as highly desirable.
In a list of the top five factors explaining their optimism, the notion that their area is special dominates home owners’ perceptions. Not only do people believe their area is up and coming relative to other areas but also that it is a honey pot for property investors. The belief that investors will propel prices upwards is rated second. Next on the list is the expectation that more and more people want to move to their area, thus pushing up demand and naturally, house prices. A shortage of second-hand homes on the market comes fourth.
Wider economic factors attract much lower priority, even though they are the key determinant of the overall health of the housing market. Only the fact mortgages are affordable makes it into the top five.
Reasons highlighted:
1: My area is up and coming relative to elsewhere
2: Property investors are buying more property where I live
3: More and more people want to move to my area
4: There is a shortage of homes being put on the market
5: Mortgages are affordable
Nicholas Leeming, director of propertyfinder.com, said: "People see their own area through rose tinted spectacles, favouring it above similar areas nearby. In every town in the UK, local rivalries foment.
"However, the notion that an area is up and coming is a relative one: if some areas are doing better than average, others must be doing worse. Prices can’t beat the market everywhere. People mistake general improvements brought about by economic growth and a healthy housing market for special local factors favouring their district.
"What’s more, their belief that an army of property investors is snapping up every available home in their area to make a killing is clearly illogical. Just 10-15 per cent of buyers are investors while the overwhelming majority are owner-occupiers.
"This is just an extension of age-old house pride. People are emotionally attached to the area they live and highly territorial about its merits. And of course, no-one wants to think they’ve bought in the wrong place."
Looking at the overall housing market, confidence steadied in July, according to propertyfinder.com’s monthly survey of househunters. After a weaker level of confidence in June, July’s househunters expected prices to rise 5 per cent over the next year, up from 4.3 per cent. Overall, the proportion of respondents expecting prices to rise remained steady at 79 per cent in July.
Crucially, buyers and sellers remained firmly in agreement on the outlook for prices. This is a key determinant of a healthy market. When buyers and sellers disagree, the number of transactions in the market drops sharply. This measure has proved a very reliable predictor of activity levels in the property market over the last two years.
Leeming commented: "We detected a slight cooling of the housing market in June. July suggests conditions remain steady."
