The RICS house price balance, which measures the difference between the percentage of surveyors seeing increases and drops in home prices, plummeted to -68 in August from -55 in July
UK home prices showed the most extensive decline in 14 years in August as demand dropped against the backdrop of higher mortgage costs and economic uncertainty, according to an industry survey Thursday.
The Royal Institution of Chartered Surveyors (RICS) house price balance, which measures the difference between the percentage of surveyors seeing increases and drops in home prices, plummeted to -68 in August from -55 in July.
Thursday’s home price balance marked the lowest figures since February 2009 and was below the -56 forecast in a Reuters poll of economists.
Simon Rubinsohn, chief economist at RICS, said the survey showed an inactive housing market with little sign of relief in prospect.
Prices are continuing to drop albeit that the comparatively moderate decline to date needs to be viewed in the context of the significant increase recorded during the pandemic, he added.
The survey results echoed other signs of slowdown in the property sector.
Mortgage lenders Halifax and Nationwide have both shown prices dropping in monthly terms as the BoE’s sustained run of interest rate hikes, continuing inflation and an extended cost-of-living crisis squeeze home-buyers.
Official figures, released on Wednesday, showed the country’s economy declined by a sharper-than-expected 0.5 per cent in July after public sector strikes and unusually rainy weather weighed on output.
Overall across the UK, RICS’ measure of agreed sales was the lowest since April 2020 when much of the property sector was on lockdown because of the pandemic, and new buyer enquiries dropped slightly from the month before.
In the rental market, tenant demand continued to surpass landlord instructions, restricting the number of available homes to rent, while a net balance of +60 per cent surveyors expect to see an increase in rental prices over the coming three months.