UK surveyors expect weakest home sales since at least 2012 - RICS

·2-min read
Residential housing in south London

By David Milliken

LONDON (Reuters) - The number of homes sold in Britain over the next 12 months is set to fall by the most in at least a decade, as fears of recession and rising interest rates hurt the market, the Royal Institution of Chartered Surveyors (RICS) said on Thursday.

The industry body said its members also seen the biggest fall in enquiries from new buyers since April 2020, at the start of the COVID pandemic, while prices were rising at the slowest pace since January 2021 and were expected to level off.

"Concerns over the economic backdrop and rising interest rates continue to take their toll on market momentum, with strong activity early in the year now giving way to a more subdued picture," RICS economist Tarrant Parsons said.

Britain, like many Western economies, saw a surge in house prices during the COVID-19 pandemic as people sought more spacious accommodation as they spent more time at home.

Despite the end of a tax break on home purchases, rising interest rates and the fastest consumer price inflation in 40 years, the Britain's main measures of house prices remain at least 10% up on a year ago.

But RICS said its survey balance for sales expectations over the next 12 months - which measures the difference between the percentage of surveyors expecting a rise and those expecting a fall - sank to -45 in August from -36 in July.

This was the lowest reading since this question was first asked in 2012.

RICS's house price balance dropped to +53 in August from a downwardly revised +62 in July, well below economists' forecasts in a Reuters poll for it hold broadly steady and its lowest since January 2021.

A lack of homes for sale was keeping prices up for now, Parsons said. The same measure of house prices for the next 12 months had dropped to just +3.

A Reuters poll last week showed economists forecast house prices would rise just 1% next year, down from an estimated 7% for 2022.

(Reporting by David Milliken, editing by Andy Bruce)