Reuters: London Despite more homes being listed for sale, British house prices stayed unchanged in June, and the market is likely to remain weak in the months ahead, according to a surveyor’s group on Thursday.
The property press believes that the market is still struggling since new buyer inquiries are stagnating and last month’s spike in mortgage approvals turned out to be an exception. The fact that household finances appear to be doing better than initially anticipated is, on only one hand, rather heartening. On the other hand, home prices are currently quite high and will begin to rise as a result of the anticipated rate hike in November. As a result, we anticipate that home price growth will remain stagnant at low single-digit percentages for the near future and that any transaction rebound would probably be modest.
Surveys and results
The home price balance of the Royal Institute of Chartered Surveyors (RICS) increased to +2 from -2 in May. RICS has said that the general picture remains one of level price growth, and survey participants did not foresee much movement in the next three months. A New survey of analysts had predicted a dip of -3 in June. The since 2016 Brexit referendum, which boosted general inflation and heightened investor concern, the property market in Britain has softened. Looking further out, the property press in London was predicted to remain poor since, in contrast to most of the vast majority of the country, prices were not anticipated to grow in the city or the nearby southeast area.
According to the trading association that represents Britain’s top banks, the real estate market remained depressed in November, with loan approvals over 40% below their level of the previous year. The British Financial Services commission said on Thursday that high street banks granted 44,811 mortgages for home acquisitions last month, slightly more than experts anticipated but far fewer than the six-month average.
The news that approvals held steady and increased slightly from October’s record low of 44,321 may give real estate brokers some solace. They will be expecting that the interest rate reduction in December and the possibility of more reductions in 2019 would help the market recover some of its confidence after months of doom.
The majority of recent housing market news has been negative, but Malcolm Barr, a JPMorgan analyst, said that there is some evidence of stabilization in the BBA approvals data.
However, the net mortgage in November was at its worst level in more than two years, growing by £4.3 billion as opposed to £4.8 billion in October and £5.5 billion on average over the previous six months.
Following polls that suggested the number of houses coming onto the market is declining faster than inquiries from potential purchasers, many City economists now anticipate house prices to decline outright during the upcoming year.
The Institutes of Directors lobbying group predicted on Thursday that a deteriorating housing market will be one of the factors that caused 2008’s economic growth to almost halve, from 3.0% to 1.7%. Despite expecting rates to drop below 5% by the end of 2008, the institute predicted that continuing inflation would limit the Bank of England’s ability to aggressively ease monetary policy to combat the recession.
The BBA also revealed on Thursday that credit card borrowing increased just a little in November, with consumers continuing to pay off debts quicker than they were racking up bills. Bank lending to businesses remained below trend in November.
Once again, London was the country’s worst region, however, prices also fell in the Southeast as well as the formerly robust Southwest. Tax reforms and the U.K.’s decision to leave the European Union have agitated the city, and years of unrelenting price increases have strained affordability and turned away potential purchasers.