‘Clear Signs’ of Momentum in U.K. Housing Marketby
RICS says August house-price index rises from 3 1/4-year low
London home values continue to fall and stagnation predicted
The U.K. housing market gained momentum in August after the shock to confidence caused by the Brexit vote, a survey found.
The Royal Institution of Chartered Surveyors said its house-price gauge rose to 12 from a three-year low of 5 in July as more real-estate agents reported appreciating prices. In London, it remained negative for a sixth month, indicating home values are falling outright.
“There are clear signs that the housing market is settling down after the initial surprise of the outcome to the EU referendum,” Simon Rubisohn, chief economist at RICS, said in the report published Thursday. “It is likely the swift response from the Bank of England, both in terms of the lowering of the capital buffer and the cut in interest rates, has played a role in helping to support confidence.”
Mortgage rates fell to record lows in August after the BOE cut its benchmark rate for the first time since 2009 in the wake of June’s decision to leave the European Union. With data showing the economy performing better than predicted, critics say the central bank acted too quickly.
A shortage of supply looks set to continue, as a dip in new instructions in August left the stock of properties for sale close to a record low, RICS said. House prices are expected to rise over the next 12 months, though London will see little change.
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