UK house sales gauge hits lowest since 2023, estate agents say
Rics says expectations for property sales and prices are more “encouraging” beyond the short term, with both projected to rise over the next 12 months on the back of cheaper borrowing costs
[LONDON] A closely watched indicator of the UK housing market plunged to the lowest level in almost two years after a property tax increase and US President Donald Trump’s trade war sent buyers into hiding.
The Royal Institution of Chartered Surveyors (Rics) said its gauge of agreed sales dropped to minus 31 in April, meaning estate agents reporting a decline outnumbered significantly those seeing an increase. The reading was last weaker in August 2023.
While the decline was mainly due to the expiry of a tax break for property buyers at the end of March, “geopolitical developments haven’t helped the mood music in the residential market over the past month”, said Rics chief economist Simon Rubinsohn.
Property surveyors also reported new buyer interest weakened further. Meanwhile, Rics’ indicator of house prices was negative for the first time since last summer at minus three, with agents expecting values to fall further over the next three months.
The report is in line with figures from Nationwide Building Society showing the biggest decline in house prices in two years in April. In March, lenders approved the fewest home loans since July last year, according to the Bank of England (BOE), which is expected to cut interest rates and downgrade its growth outlook later on Thursday (May 8).
However, Rics said expectations for property sales and prices are more “encouraging” beyond the short term, with both projected to rise over the next 12 months on the back of cheaper borrowing costs.
The prospect of three or more further rate cuts from the BOE this year has fuelled a price war among lenders.
Moneyfacts data shows that the average two-year fixed mortgage rate has dropped to 5.15 per cent, down from 5.48 per cent at the start of the year. BLOOMBERG
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