UK House Prices Continue To Gain On Limited Supply: RICS

UK house prices continued to increase across the UK due to the lack of supply, the Residential Market Survey from the Royal Institution of Chartered Surveyors showed on Thursday.

A net 63 percent of respondents said house prices increased in July. The balance was forecast to ease to 60 percent. The lack of supply was the crucial factor supporting the continued house price growth.

Although the balance was more moderate than a recent high of +78 percent in April, it was comfortably above the long run average of +13 percent. The score still indicates a firmly upward trend, RICS said.

Nonetheless, house price expectations for the coming year eased in each of the past five months. The net balance fell to 30 percent in July from 78 percent back in February.

The net balance for new buyer enquiries remained negative for a third month, which was the longest stretch of falling demand from buyers since the early stages of the pandemic.

The sales expectations were the most downbeat since March 2020, with the balance easing to -36 percent from -21 percent in June.

Stock levels of agents remained close to all-time lows in July. The average stock levels on estate agents books stood at 36 per branch. Data suggested that a material pick-up in supply is unlikely to emerge in the immediate future.

Tarrant Parsons, RICS senior economist said it is little surprise that housing market activity is losing some momentum amid rising cost of living, slowing economic growth and higher interest rate.

Although house price growth is likely to continue to ease, respondents still anticipate prices will be modestly higher than current levels in a year's time, Parsons added.

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