Housing market picking up as lower rates tempt buyers
THE housing market improved last month thanks to lower mortgage rates tempting buyers, according to the Royal Institution of Chartered Surveyors.
The closely watched RICS residential market survey found new buyer inquiries were minus 14% in November versus minus 28% the prior month.
It said this is the best performance for new buyer inquiries since April 2022.
Agreed sales also improved according to the RICS’s data, at minus 11% nationally, compared to minus 23% in October. In East Anglia, the North West, and Northern Ireland, agreed sales rates turned positive.
It added that house price sentiment also picked up. It said its house price net balance gauge – which measures the difference between those reporting an increase in prices and those seeing falls – was minus 43.
Although that indicates more people are reporting falls in house prices, it is an improvement on minus 61 in October.
The RICS said this “suggests the pace of house prices declines has moderated to a certain extent”.
The data follows figures from both Nationwide and Halifax, which showed increases in house prices following months of decline. RICS chief economist Simon Rubinsohn said: “Sentiment is a little less negative than previously was the case with, critically, the new buyer inquiries indicator finally beginning to stabilise.
“This is being aided by increased confidence that the interest rate cycle has peaked which is reflected in more competitive mortgage products coming to the market.”
Gabriella Dickens, of Pantheon Macroeconomics, said the RICS data points to a brighter outlook for the housing market in 2024 and prices should start to increase next year, rising approximately 5% between April and December.
She said: “Demand should continue to recover, as the fall in market expectations for Bank of England rate causes mortgage rates to drop back materially, while real incomes continue to recover. The risks to our forecasts are now skewed to the upside.”
This month Nationwide said house prices rose 0.2% in November while Halifax reported a 0.5% increase.