LONDON, Oct 8 (Reuters) – The prospect of higher interest rates weighted on Britain’s housing market last month, with downward pressure on house prices increasing for the first time in four months, the Royal Institution of Chartered Surveyors said on Thursday.
RICS said its house price balance fell to -32 last month from a five-month high of -28 in August, a bigger decline than expected in a Reuters poll of economists, while the number of new properties coming onto the market rose for the first time since the middle of last year.
“A renewed rise in interest rate expectations has created a fresh headwind for the housing market, with buyers becoming a little more cautious and sales activity losing some momentum,” RICS Head of Market Research Tarrant Parsons said.
• RICS members expect property prices to fall further over the next three months but to be stable over a 12-month horizon
• London has the most negative price balance while Scotland and Northern Ireland reported rising prices
• Financial markets expect the BoE to raise rates in November, and three more times in 2027, though forecasts earlier this year for a string of rate rises proved premature
• RICS’ measure of new buyer enquiries weakened for the first time since March, though it remains well above the low hit just after the outbreak of the US-Iran war
• Rising demand from tenants and fewer properties from landlords has pushed the net balance for rents above its average in the first half of the year, though it is lower than in August
• Mortgage lender Lloyds reported unchanged house prices in September while Nationwide reported a small unexpected drop
• Britain’s Office for National Statistics reported a 3.8% annual rise in rents for private-sector housing in August and a 1.4% rise in house prices in the 12 months to July
(Reporting by David Milliken, editing by Andy Bruce)
