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UK housing market sees soft start to year - RICS

By Michele Maatouk

Date: Thursday 08 Feb 2018

UK housing market sees soft start to year - RICS

(ShareCast News) - The UK housing market kicked off the new year much as it ended the last, with new buyer enquiries and sales drifting lower, according to the latest survey from the Royal Institution of Chartered Surveyors.
The balance of surveyors reporting that house prices have risen over the last three months held steady at +8 in December, slightly above consensus expectations for a drop to +5.

Meanwhile, the new buyer enquiries balance rose to -11 from -15 but remained in negative territory for the tenth consecutive month.

The survey found that prices edged up at the national level, but the price gauge in London remained firmly in negative territory while price drops were also reported across the South East, East Anglia and the North East, albeit to a much lesser extent than the capital.

Surveyors said they expect prices at a national level to be steady in the next three months but to rise over the course of the year, with the exception of London.

RICS chief economist Simon Rubinsohn said: "The latest RICS results point to housing transactions at a headline remaining pretty subdued over the coming months despite some more positive comments from contributors to the survey. Lack of inventory on agents' books continues to provide a major challenge with the number of valuations being undertaken not suggestive of a pick-up in new supply anytime soon.

"Divergent regional trends remain very much to the fore with the market in many parts of the country still actually behaving in a solid if unspectacular way despite the downbeat headlines. Affordability issues continue to play a key role in explaining this pattern with those areas where house price earnings are most stretched seeing the softest markets."

Pantheon Macroeconomics economist Samuel Tombs said: "The strong labour market means that few homeowners need to sell up in a weak market. Looking ahead, however, we continue to see scope for demand to weaken further, as mortgage rates continue to rise. That will keep prices frozen around current levels, hitting consumers' confidence."


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