The RICS said on Wednesday that its main house price balance, which measures the difference between surveyors seeing drops and rises in house prices, moved into positive territory for the first time since October 2022
Britain’s housing market recovered further last month, according to property surveyors who said house prices, sales and enquiries rose, but pressure in the rental sector intensified as tenant demand continued to exceed the number of available homes to rent.
The Royal Institution of Chartered Surveyors (RICS) said on Wednesday that its main house price balance, which measures the difference between surveyors seeing drops and rises in house prices, moved into positive territory for the first time since October 2022.
Its house price balance rose to +11 in September after a revised August reading of zero. A net balance of +54 of surveyors expected house prices to rise in the coming year, the strongest figure since April 2022.
A measure of expected sales for the next 12 months increased to a net balance of +45, compared to +3 a year ago.
Tarrant Parsons, RICS’ head of market analytics, said the reduction in borrowing costs in August had helped to recover buyer demand.
A further unwinding in monetary policy is expected over the months ahead, which should create a more favourable backdrop for the market moving forward, Parsons said.
The BoE’s benchmark Bank Rate now sits at 5% after August’s first cut in borrowing costs in four years. The British central bank kept rates on hold last month. But investors on Wednesday assigned a roughly 83% probability of a quarter-point cut on November 7.
Other gauges of Britain’s housing market have also pointed to a recovery, helped by expectations of another interest rates cut by the Bank of England. Figures from mortgage lender Halifax on Monday showed house prices grew in September at the fastest annual pace since late 2022.
RICS said that a potential rise in capital gains tax in the new Labour government’s first budget later this month was prompting some homeowners to list their properties but that this was contributing to a lack of supply for renters.
In the lettings market, demand continued to rise and rents are projected to increase over the coming months.