Sunday, February 25, 2024

Housing market shows signs of stabilising

UK Housing Review

The latest UK Residential Survey from the RICS shows, the house price balance was -43 last month

The UK housing market showed signs of stabilising in November, according to an industry survey on Thursday, although higher interest rates continued to weigh heavily.

The latest UK Residential Survey from the RICS shows, the house price balance was -43 last month. While still in negative territory, the figure was well above October’s revised -61, and ahead of predictions for -57.

The net balance for new buyer enquiries was -14, suggesting buyer demand was continuing to decline. But it was the least negative figure since April last year.

A net balance is the difference between the number of surveyors seeing rises and those seeing declines.

Near-term sales expectations for the next three months also increased, with the first positive reading, 6, since early last year.

Simon Rubinsohn, RICS chief economist, commented: The survey provides further evidence that sentiment is a little less negative than previously was the case, with – critically – the new buyers enquiries indictor finally beginning to stabilise.

This is being aided by increased confidence that the interests rate cycle has peaked, which is reflected in somewhat more competitive mortgage products coming to the market, Rubinsohn said.

The BoE has hiked interest rates 14 times since December 2021, to 5.25 per cent, as it seeks to fight soaring inflation. Mortgage rates also surged in response to last autumn’s mini budget, stretching affordability even further.

Nevertheless, mortgage rates are now beginning to drop, and the Bank of England has paused interest rate hikes since August, as inflation drops.

The Monetary Policy Committee (MPC) is widely expected to leave the cost of borrowing unchanged when it meets later on Thursday.

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