UK buyers retreat from housing market, further slowdown seen: RICS
BRITAIN’S housing market showed signs of a slowdown in June, and property surveyors expect activity to remain subdued as higher borrowing costs hit new buyer enquiries, according to an industry survey on Thursday (Jul 13).
The Royal Institution of Chartered Surveyors (RICS) said a poll of its members showed a net balance of minus 45 in new buyer enquiries last month, down from the minus-20 figure in May.
June’s reading – which represents the difference in percentage points between members seeing rises and falls in new buyer enquiries – was the most negative figure since a minus 51 in October last year. That came in the aftermath of former prime minister Liz Truss’ “mini-budget” economic plan.
Britain’s housing market faces pressure from softer buyer demand and falling house prices against a backdrop of surging mortgage rates and the Bank of England’s (BOE) battle to tame stubborn inflation. Average two-year fixed mortgage rates hit a 15-year high earlier this week.
Simon Rubinsohn, chief economist at RICS, said activity levels were likely to remain subdued in this environment.
“The latest increase in interest rates and the impact this has already had on mortgage rates is clearly visible in… buyer enquiries, sales and prices which have all retreated over the past month,” he said.
A NEWSLETTER FOR YOU
Tuesday, 12 pm
Property Insights
Get an exclusive analysis of real estate and property news in Singapore and beyond.
Financial markets expect the BOE, which has raised interest rates for 13 times in a row since December 2021, to increase its bank rate to 6.25 per cent by the end of this year, up from 5 per cent now.
RICS’ gauge of agreed sales slipped to a net balance of minus 34 in June, significantly below the minus 8 in May, and the lowest in six months.
Its house price balance – which measures the difference between the percentage of surveyors seeing rises and falls in house prices – declined to minus 46 last month from minus 30 in May. A Reuters poll of analysts had pointed to a reading of minus 34.
British mortgage lender Halifax last week said house prices fell by 2.6 per cent year on year in June, the largest annual drop since 2011. Rival Nationwide reported a 3.5 per cent annual decline in property prices, the biggest since 2009.
Share with us your feedback on BT's products and services
