UK housing market picks up as mortgage rate fall, RICS survey shows

8th Aug 2024 09:04

(Sharecast News) - The UK house sales market turned a "bit sunnier" last month, according to the latest UK Residential Survey by the Royal Institution of Chartered Surveyors (RICS), with near-term sales expectations now at their strongest in four and a half years.

The monthly RICS survey found that falling mortgage rates during July improved positivity in the sector, with net new buyer enquiries picking up 2%, after a 6% drop in June. This was the first time in four months that buyer numbers have grown.

Sales trends also improved with the decline in the number of agreed sales falling by a net 2%, following falls of 6% and 13% in June and May respectively.

Looking ahead, a net 30% of respondents to the RICS survey predict rising sales over the next three months - the strongest reading since January 2020. Meanwhile, the longer-term outlook was also optimistic, with a net 45% expecting sales increases in 12 months, up from 40% in June.

On the downside, house prices were still falling across the country, with all region in England showing negative sentiment towards prices in the near term.

"The new government's focus on boosting housing development alongside the recent quarter point base rate cut does appear to have shifted the mood music in the sales market, with projections for both near and medium activity picking up," said Simon Rubinsohn, chief economist at RICS.

"Inevitably, significant challenges lie ahead in delivering on the ambitions around planning reform and it is far from clear that the Bank of England will follow the August move with further easing over the coming months, but, even so, the policy mix is becoming more supportive for the sector."