Britain’s property surveyors see improvement in housing market

UK property surveyors saw flickers of life return to the housing market in February as both buyers and sellers returned to lift sales.

The Royal Institution of Chartered Surveyors (RICS) said that house prices suffered another decline, but its more forward-looking survey also pointed to signs of improvement despite higher mortgage costs.

The findings added to growing evidence that the UK property market is holding up stronger than expected against soaring mortgage rates and the cost-of-living crisis. It follows Halifax data on Tuesday (Mar 7) that showed the biggest increase in house prices since June.

“Near-term expectations suggest market activity will remain generally subdued over the coming months, although the latest survey feedback shows tentative signs that the ongoing decline in buyer enquiries is now moderating,” Tarrant Parsons, senior economist at RICS, said in a report on Thursday.

RICS said the survey pointed towards a “more stable picture emerging” throughout 2023 after the market was rocked by Bank of England interest rate rises and the political turbulence caused during Liz Truss’s term as prime minister.

New buyer enquiries rebounded to a net balance of minus 29 per cent in February. It means that more surveyors reported that buyer demand had declined rather than rose, but the metric was up sharply from minus 45 per cent in January.

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Its gauge on new sale listings improved to a net balance of minus 4 per cent from minus 12 per cent. Agreed sales picked up, rising from minus 36 per cent to minus 26 per cent.

However, homeowners are being forced to sell up below their asking prices after a calming from the frenetic pace of the property market post-pandemic.

Some 60 per cent of respondents said prices were being agreed at below the asking price on properties worth up to £500,000 (S$801,918) while the share increased to 70 per cent for homes valued between £500,000 and £1,000,000. RICS’s overall price gauge was down slightly at minus 48 per cent.

“The housing market continues to adjust to the tighter lending climate, with stretched mortgage affordability still weighing heavily on activity,” said Parsons. BLOOMBERG