By LONDON (Reuters) – British property surveyors expect sales to continue to grow in the coming months after a gauge of house prices turned positive for the first time in nearly two years, though concerns remained about affordability despite easing borrowing costs.
The Royal Institution of Chartered Surveyors said on Thursday that its main house price balance, which measures the difference between surveyors seeing falls and rises in house prices, moved into positive territory for the first time since October 2022.
Its house price balance rose to +1 in August from -18 in July, and well above the -14 forecast by economists in a Reuters poll. A measure of expected sales over the next three months was the strongest since January 2020, before the COVID-19 pandemic struck Britain.
Other indicators of Britain’s property market have pointed to momentum picking up in the sector after a recent fall in interest rates.
Data from mortgage lender Halifax showed house prices grew at the fastest annual pace since late 2022 in August, although rival Nationwide said prices dropped month-on-month by 0.2% in August, the first monthly fall since April.
Simon Rubinsohn, chief economist at RICS, said there was some uncertainty about the scope for further interest rate cuts by the Bank of England and the upcoming budget.
“Affordability remains an issue in the sales market even with somewhat cheaper finance now available but the picture appears even more acute in the lettings market where the amount of rental stock continues to diminish.”
British finance minister Rachel Reeves will set out her plan for spending and tax on October 30.
The BoE is expected to hold interest rates on Sept. 19 after cutting borrowing costs for the first time last month from a 16-year high of 5.25%.
RICS’ monthly survey also showed and improvement in overall sentiment and buyer interest. Its measure of new buyer enquiries rose to a net balance of +15 in last month from +4 in July, the highest since October 2021.
The net balance of agreed house sales across Britain also rose and respondents noted a pickup in the number of properties on the market.