UK house prices show weakest growth in nine months: RICS

[LONDON] British house prices rose at their slowest rate since August 2016 last month and fewer houses were put up for sale, as jitters about Thursday's election added to a lull in the housing market, a survey showed.

The Royal Institution of Chartered Surveyors (RICS) said its monthly house price balance sank to +17 in May from April's +22, below all forecasts in a Reuters poll of economists though still showing modest price rises over the past three months.

"Price growth appears to have lost momentum in the latest report and expectations suggest a further cooling is likely in the near term," RICS said. "The general election is again commonly cited as a factor hindering activity, causing some hesitancy from both buyers and vendors."

Opinion polls suggest Prime Minister Theresa May's Conservatives will win a fresh majority in Thursday's election, but their lead over the opposition Labour Party has narrowed since Mrs May called the election in April.

RICS said that over the past month, the number of homes being put up for sale fell by the most since just after last year's vote to leave the European Union.

Other housing market surveys have shown outright price falls in recent months, compared with year-on-year price rises of almost 10 per cent before Britain voted to leave the EU.

Mortgage lender Nationwide has reported three consecutive monthly price falls for the first time since 2009, while on Wednesday mortgage lender Halifax reported annual house price growth falling to a four-year low of 3.3 per cent.

RICS said the overwhelming majority of its members expected prices to rise across Britain as a whole during the next year, and predicted average house price increases of 3.5 per cent a year over the next five years.

"Perhaps the most ominous signal emanating from the data released today is that contributors still expect house prices to increase at a faster pace than wages over the medium term despite the difficulty many first time buyers are clearly having," RICS chief economist Simon Rubinsohn said.

REUTERS