U.K. House-Price Index Falls as Snow Disrupts Market, RICS SaysSvenja O’Donnell
An index of U.K. house prices fell in January as heavy snow affecting most of the country depressed interest from potential buyers, according to the Royal Institution of Chartered Surveyors.
A gauge by London-based RICS declined to minus 4 from minus 1 in December, it said in an e-mailed report today, citing a monthly poll of property surveyors. While a measure of new buyer inquiries fell to minus 9 from 10, the outlook for home values improved, it said.
A decline in mortgage interest rates is helping to boost demand, according to RICS, which said a sales gauge increased for a fourth month in January. The Bank of England said last week that its Funding for Lending Scheme, intended to reduce banks’ funding costs, should continue to ease credit conditions.
“Activity levels are still encouraging,” RICS director Peter Bolton King said in a statement. “There is some optimism out there that things could continue to improve.”
A measure of new instructions from home sellers fell to minus 5 in January from 1 in December, as bad weather “depressed” activity, RICS said. A gauge of newly agreed sales rose to 15 from 2.
The three-month price expectations net balance remained unchanged at 1, the highest in more than 2 1/2 years, while the 12-month expectations gauge jumped to 18 from 5. The medium-term outlook for prices is improving, and “the worst might be over,” RICS said.
Acadametrics Ltd. and LSL Property Services also cited the Bank of England’s FLS last week when they said that home prices rose in January. LSL Commercial Director David Brown said market conditions are “certainly improving.”
BOE data on Jan. 30 showed that mortgage approvals rose more than economists forecast in December, and Governor-designate Mark Carney said the FLS has shown “encouraging signs.” Still, Halifax said on Feb. 6 that home values declined last month and that the outlook for the property market remains unclear.