UK House Prices Stabilising
According to an articles in The Guardian and Financial Times, even though the UK housing market remains in decline, with prices continuing to fall, there are some signs of house prices stabilising. This change is being driven by an improvement in new buyer inquiries and sales last month, according to surveyors.
The Financial Times reports that surveyors had told the RICS survey that they expected house prices to fall in the next three months, with figures largely unchanged from last month, and a further but lesser contraction in the year ahead. Some analysts have predicted the drop in prices to mean that they will be roughly 8% below their August 2022 peak, others have predicted a sharper drop of between 10-15%.
The RICS monthly survey measures the proportion of surveyors who reported a rise in new buyer enquiries from those saying they fell. Overall, last month the balance was -29% and while this still shows a drop, it is up from -40% in January and is the smallest decline reported since last July.
The number of new sales being processed rose from -36% to -26%, but the average time taken to complete a transaction is now approaching 19 weeks and continues to rise.
Interest Rates
Interest rates were raised again last month when the Bank of England raised its base rate for the 10th consecutive time, to 4%, however, its governor, Andrew Bailey, last week signalled that rates may have peaked. This is in contrast to last year’s forecasts that were predicting a peak of between 5-6%. The cost of mortgages, which has a big impact on the market, peaked at over 6% after the disastrous mini-budget last year, but have since reduced to between 4-5%.
Tarrant Parsons, a senior economist at RICS, said: “Given the ongoing weakness in demand, house prices remain on a downward trajectory, and are expected to see further falls through the first half of the year at least. “Near-term expectations suggest market activity will remain generally subdued over the coming months, although the latest survey feedback shows tentative signs that the ongoing decline in buyer inquiries is now moderating.”
Cautious Optimism
There are signs of cautious optimism that the worse is behind us and a hope that Wednesday’s Budget will reflect the critical role that housing plays in the economy and there is support to boost building of new homes as well as commercial property conversions.
If you are planning on moving home or purchasing your first property, then get in touch. Avery & Co are RICS registered chartered surveyors and we can provide you with an independent survey or valuation as well as an EPC Certificate. We’d be happy to help. You can contact us on 0330 088 5040 or via our contact form.
