UK Housing Market Gains Momentum in February, RICS Survey Reveals

In February, the UK housing market experienced an uptick, as indicated by a recent industry survey. This development comes amidst speculations regarding the trajectory of the Bank of England’s interest rates, which could potentially influence future demand.

The survey conducted by the Royal Institution of Chartered Surveyors (RICS) revealed that new buyer enquiries maintained a steady pace. The net balance in February was recorded at +6, mirroring the revised figure from January and matching the strongest level since February 2022.

Regarding house prices, the survey noted an improvement, although the overall trend remains negative. The price measure climbed to its highest point since October 2022, registering at -10%, an increase from -18% in January. This figure surpassed the -11% anticipated by economists surveyed by Reuters.

Simon Rubinsohn, RICS’s chief economist, remarked positively on the findings. The latest data align with other indicators suggesting a stabilization in the UK’s housing market. This change is partly attributed to a reduction in high inflation and a softening in buyer demand due to interest rate shifts in 2023. Supporting this trend, mortgage lender Halifax reported a consecutive monthly rise in house prices for February.

The survey also showed an increase in new property listings, with a net balance of +21 surveyors reporting a rise in new instructions to sell. This figure is the highest since October 2020, reflecting a period of booming property markets in many Western countries during the COVID-19 pandemic.

However, caution remains within the sector. RICS noted that uncertainty around the pace and timing of interest rate changes might hinder further progress. The survey reported a slight dip in agreed sales for February, with a net balance of -3. Yet, there is an expectation among respondents for an improvement in sales activity over the next year.

In the rental market, there was a marginal increase in demand, and rents are anticipated to continue rising in the coming months, albeit at a slower rate. Rubinsohn pointed out that while the surge in private rents might be losing steam, the ongoing imbalance between demand and supply suggests that significant relief for tenants is unlikely in the near term.