House prices continue to climb - Rics

14th Nov 2024 08:35

(Sharecast News) - UK house prices continued to rise in October, a closely-watched survey showed on Thursday, as the market benefited from lower borrowing costs.

According to the latest residential market survey from the Royal Institution of Chartered Surveyors, both house prices and sales improved in October.

The house price net balance increased to 16 from 11 in September and 0 in August, while the agreed sales balance was 9, compared to last month's 5.

Buyer demand was largely unchanged, with a balance of 12 compared to 13 a month earlier, but respondents remained upbeat for the rest of the year. The net balance of those expecting house prices to rise in the next three months was 20, up from 12 in September.

The survey comes a week after the Bank of England cut interest rates by 25 basis points in a widely-expected move.

It is the second time so far this year it has moved to ease the cost of borrowing, in light of falling inflation, with further reductions likely over the next year.

Tina Paillet, Rics president, said: "The growth in residential sales could be further supported by recent interest rates announcements.

"Meanwhile, the pending expiration in the higher stamp duty threshold in spring 2025 may cause homeowners and first-time buyers to rush to take advantage of the current rate, but this will likely be followed by a weaker trend after the deadline has passed."

Tarrant Parsons, head of market analysis at Rics, added: "The improvement in buyer demand [has translated] into growth in the number of sales being agreed. Just as importantly, forward-looking sentiment points to this bright trend remaining in place in the coming months.

"That said, the rise in bond yields following the Budget, alongside a general increase in financial market implied interest rate expectations over the past couple of weeks, will likely present something of a headwind."

A net balance is the proportion of respondents reporting a rise minus those seeing a fall. The survey was based on 269 responses from 504 branches.