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UK house prices hit 10-year low, but signs of recovery are emerging

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RICS chief economist Simon Rubinsohn is cautious about how long the recovery will last, due to uncertainty about a possible jump in unemployment when the government's jobs retention programme ends in October.

London

A GAUGE of British house prices hit a 10-year low in May, but there are signs that confidence is returning to the market after the government lifted its novel coronavirus lockdown for buyers and sellers in England, a survey showed on Thursday.

The Royal Institution of Chartered Surveyors (RICS) said its headline house price balance slumped to -32 per cent in May, its lowest since 2010, from -22 per cent in April.

But expectations for house prices in 12 months were less negative than a month earlier, and new buyer enquiries recovered from a record low of -94 per cent in April to -5 per cent in May.

Near-term sales expectations were now broadly neutral and the 12-month outlook improved, RICS said.

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A net balance of 10 per cent of survey respondents anticipate sales picking up over the next 12 months.

While the gradual reopening of the property market comes as a relief for the industry, both buyers and sellers remain cautious amid uncertainty about the pace of the recovery and job security.

Property website Zoopla said on Wednesday that house sales in England had rebounded since the government allowed estate agents to reopen viewings last month.

RICS chief economist Simon Rubinsohn said that sales that were already in the pipeline before the lockdown were now largely going through.

"It remains to be seen how sustained this improvement will prove," he said, pointing to uncertainty about a possible jump in unemployment when the government's jobs retention programme expires at the end of October.

"For the time being, respondents to the survey see the trend in transactions being broadly flat," he said.

The survey also found that homes with outdoor space and fewer communal areas look set to become more desirable.

This may also exacerbate some of the inequality issues exposed by the pandemic.

Buyers are likely to increasingly favour properties with gardens or balconies and greater private space, and turn away from tower blocks and urban areas, RICS said. REUTERS, BLOOMBERG

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