UK housing market gathers tempo regardless of cloudy outlook, RICS survey exhibits

(Reuters) – Britain’s housing market strengthened additional in November though uncertainty over the financial outlook might curtail exercise within the months forward, in response to a survey on Thursday from the Royal Establishment of Chartered Surveyors.

RICS’ month-to-month home value gauge jumped to +25 in November from +16 in October, its highest stage since September 2022. A Reuters ballot of economists had pointed to a studying of +19.

Mortgage lenders Nationwide and Halifax additionally reported a pointy pickup in home costs throughout November and Financial institution of England information confirmed lenders in October accepted essentially the most mortgages for home purchases since August 2022.

Nevertheless, RICS mentioned gross sales may sluggish subsequent yr as client and enterprise confidence gave the impression to be weakening and markets had scaled again their expectations of BoE charge cuts, pushing up mortgage prices.

“Though the most recent survey outcomes proceed to sign a gentle enchancment in purchaser demand throughout the residential market, the broader macro setting is prone to pose extra headwinds transferring ahead,” RICS senior economist Tarrant Parsons (NYSE:PSN) mentioned.

“The current rise in mortgage rates of interest might curtail the restoration in market exercise earlier than lengthy, and that is mirrored within the barely much less optimistic gross sales expectations information coming via this month,” he added.

On-line property portal Rightmove (OTC:RTMVY) mentioned on Thursday it was extra optimistic concerning the outlook for 2025. It anticipated asking costs to rise by 4% in 2025, its highest prediction since 2021.

“We anticipate a busier yr in 2025, with round 1.15 million transactions accomplished,” mentioned Rightmove property knowledgeable Tim Bannister.

Will increase to stamp obligation land tax in April have been prone to increase exercise within the first half of the yr, whereas additional reductions in Financial institution of England rates of interest are additionally prone to help the market, he mentioned.

The BoE reduce rates of interest in November for less than the second time since 2020 and mentioned future reductions are prone to be gradual because it predicts the brand new authorities’s first price range will result in barely quicker inflation and financial development subsequent yr.