Strong buyer demand boosts UK housing market - RICS

10th Apr 2024 09:16

(Sharecast News) - The UK housing market continued to strengthen last month, an industry survey showed on Thursday, as prices stabilised and buyer demand improved.

According to the latest RICS UK Residential Survey, buyer demand had a net balance of 8 in March, the most positive result since February 2022.

New instructions also strengthened, with a balance of 13.

House price trends, meanwhile, became less negative for the seventh consecutive month. The house price balance was -4, an improvement on February's -10 and well above September's low of -67.

RICS noted: "This suggests a stable picture is now in place for house prices across the UK."

As a result, respondents were increasingly optimistic about the coming months, with a net balance of 13 expecting sales volumes to rise over the next three months. In February, the balance was 6.

Tarrant Parsons, senior economist at the Royal Institution of Chartered Surveyors, said: "Demand continues to recover gradually across the UK housing market, with new buyer enquiries rising for a third month in succession.

"With the inflation backdrop turning a little less difficult of late, this has led to expectations that the Bank of England will be able to start lowering interest rates later in the year. This should continue to support the market to a certain degree going forward."

The BoE hiked rates 14 times from December 2021, as it looked to tackle surging inflation. Mortgage rates also rocketed following the government's disastrous mini budget in September 2022, which - along with the ongoing cost of living crisis - stretched affordability, hitting the housing market hard.

However, mortgages rates have moderated in recent months, and with inflation now well off its peak at 3.4%, the cost of borrowing has been left unchanged since August.

Analysts now expect the BoE's next move to be a cut in interest rates at some point this year.