U.K. RICS House-Price Index Slips as Sellers Get Realistic
A U.K. house-price index slipped last month as homeowners showed “realism” in a bid to sell properties, according to the Royal Institution of Chartered Surveyors.
The gauge by London-based RICS fell to minus 24 from minus 23 in September, it said in a statement today. An index of sales climbed to the highest since April 2010, while a separate indicator of demand also rose.
Halifax said yesterday the U.K. property market is a “mixed picture” as it reported an increase in values based on its gauge in October. While the Bank of England’s key interest rate is at a record low, consumer confidence is being undermined by inflation that’s twice the pace of wage growth, the government’s fiscal squeeze and Europe’s debt crisis.
“It’s encouraging that activity levels appear to have edged upwards,” Ian Perry, RICS housing spokesman, said in the statement. “However, with the chaotic events in the euro area threatening to spill over to the U.K. and banks still imposing tough conditions on loans to first-time buyers, any recovery in sales is still likely to be relatively modest.”
The pound rose 0.1 percent from yesterday and traded at $1.6074 at 9:38 a.m. in London. The yield on the 10-year government bond rose 3 basis points to 2.293 percent.
The Bank of England will hold its key rate at 0.5 percent on Nov. 10, according to all 52 economists in a Bloomberg News survey. The central bank, which expanded its bond-purchase program to 275 billion pounds ($441 billion) last month to support the recovery, will probably maintain that level this week, said all 38 economists in a separate poll.
RICS’s index of sales rose to 8 in October from minus 3 in September. Some respondents to the survey “attributed this to growing realism from many sellers, who now appear to more willing to take offers in order to secure a sale,” RICS said.
In the three months through October, the number of completed home sales per realtor rose to 15, the highest since April. Nevertheless, the number is “still very low from a historical perspective,” RICS said.
A measure of new buyer enquiries rose to 7 in October from 4 in September, while an index of new vendor instructions, a gauge of supply, increased to 3 from minus 4. Of the 11 regions RICS tracks, London was the only area to record an increase in prices over the past three months.
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