By Andy Bruce
(Reuters) – Britain’s housing market slowed noticeably in January as house price growth and buyer demand cooled, according to a survey of chartered surveyors on Thursday who still expect activity to pick up in the year ahead.
The Royal Institution of Chartered Surveyors said its net balance of house prices – which measures the difference between surveyors reporting a rise and a fall – declined in January to +22 from a downwardly revised +26 in December, the highest reading since September 2022.
A Reuters poll of economists had pointed to a reading of +27.
The survey’s measures of growth in new buyer enquiries and agreed sales both weakened, although respondents were optimistic about sales and house prices in the months ahead, RICS said.
“Growth in buyer demand lost a bit of momentum through the early part of the year, with this flatter picture likely linked to the turbulence seen across money markets in the first half of January,” said Tarrant Parsons, RICS head of market analytics.
Interest rates on British government bonds and swaps – which influence costs for new mortgages – soared in early January, driven largely by global factors, before falling again. They are now lower than their level at the end of 2024.
“Moving forward, respondents continue to envisage a slightly positive near-term outlook for sales activity. This should be further supported by the unwinding of some of the pressures around mortgage interest rates over the past couple of weeks.”
Economists think an increase in stamp duty land tax in April is likely to boost activity in the first half of the year, while reductions in Bank of England interest rates are also likely to support the market.
Last week the BoE cut interest rates by a quarter-point. Two policymakers wanted a bigger move to offset a slowdown, but the majority said they should be careful about further moves.
(Reporting by Andy Bruce; editing by David Milliken)
