(Bloomberg) — Britain’s housing market picked up in February, with an increase in both new buyer inquires and properties for sale after prices stabilized.
The findings by the Royal Institution of Chartered Surveyors paint a more upbeat outlook for the market after a slump in prices in 2023 triggered by the highest interest rates in 16 years. With economists anticipating rate cuts from the Bank of England later this year, home buyers are becoming more confident.
“The rise in the number of appraisals taking place points in the right direction,” Simon Rubinsohn, chief economist at RICS, said in a report Thursday. “Whether the increase in stock coming back to market will be sustained is likely to be a critical factor in explaining how things play out over the balance of the year.”
The survey confirms reports from mortgage lenders Nationwide Building Society and Halifax showing that house prices picked up at the start of the year and now are little changed from their peak in 2022. Bank of England data also have shown an increase in mortgage approvals, suggesting strength in the market.
RICS also found:
- Agreed sales were little changed in February, registering a balance of minus 3% — stronger than most of the past year but down slightly from January.
- Sales expectations for the coming year were positive at a reading of 42%.
- New sales instructions hit the highest level since October 2020, a contrast to declines in most of last year.
- House prices in RICS survey were headed down but at the least negative pace since October 2022. A turnaround in London is more pronounced.
In the home rental market, landlord instructions continue to dwindle while tenant demand kept rising at a slightly more modest pace. Most agents expect rents to rise over the near-term, although fewer were positive than a year ago.
“There are signs that the relentless upward trend in private rents is losing momentum,” Rubinsohn said. “But fresh demand is still comfortably outstripping supply in this area which suggests there is unlikely to any significant relief for tenants.”
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