UK house price growth falls to lowest since March 2021 – RICS

7:04 pm Wednesday, July 13th, 2022

By David Milliken

LONDON (Reuters) – British house prices rose at their slowest pace in more than a year last month as buyer demand softened slightly although the overall breadth of price increases remained well above pre-pandemic levels, a survey showed on Thursday.

The Royal Institution of Chartered Surveyors’ (RICS) monthly house price balance – measuring the difference between the percentage of surveyors reporting price rises and those seeing a fall – fell to +65 in June from a downwardly revised +72 in May.

This was the index’s lowest reading since March 2021, and lower than forecast in a Reuters poll of economists, but still well above the series’ long-run average of +13.

“Pricing across much of the housing market remains resilient for now with a shortage of stock continuing to be a feature highlighted by many respondents to the survey,” RICS chief economist Simon Rubinsohn said.

Britain’s housing market, like that in many other rich nations, boomed during the COVID-19 pandemic as people sought more space to work and socialise at home. Official figures for April showed house prices were 22% higher than in February 2020.

However, analysts are looking at the extent to which a 40-year high in consumer price inflation and rapidly rising Bank of England interest rates will cool the market.

Last month mortgage lender Nationwide said there were “tentative signs of a slowdown”, although its rival Halifax reported a 13.0% annual rise in prices for June, the largest since 2004.

RICS said the balance of its members expecting house prices to rise over the next 12 months fell to +37 from +78 in February. Upward pressure on rent, however, was growing.

“A lack of social housing development allied to more onerous changes in the private lettings market is … leaving the rent expectations metric pointing to further strong growth in the midst of the worsening cost of living crisis,” Rubinsohn said.

(Reporting by David Milliken; Editing by William Schomberg)