By Anthony O. Goriainoff
Although U.K. housing demand remains subdued, the near-term outlook for sales activity has turned slightly more optimistic, according to data from the Royal Institution of Chartered Surveyors.
The latest residential survey shows a subdued market backdrop, with buyer demand, sales and prices staying in slightly negative territory. RICS said the indicator continued signaling a modest weakening in demand from home buyers, and marked the third consecutive month where enquiries have reportedly slowed.
New buyer enquiries were minus 7% in June, broadly in line with May's minus 8%, the association's survey showed.
Still, forward-looking sentiment has improved as more than 20% of respondents foresee a recovery in residential sales volumes over the next three months, up from more than 10% in May. RICS said this represents the most upbeat figure for near-term sales expectations since January 2022.
Respondents said they believed prices will continue to rise over the next 12 months, highlighting a key challenge for the new Labour government as boosting the country's housing supply won't be an easy task.
"Respondents now sense the decline in house prices has largely run its course. Moreover, at the 12-month time horizon, a net balance of over 41% of contributors expect to see an increase in house prices," RICS said.
Any boost to confidence from items such as the possibility of lower interest rates will likely intensify the nationwide affordability challenge, it added.
Nationally, house prices tracked at minus 17%, indicating price falls have persisted, with East Anglia, the South East and South West of England all returning negative readings for house prices in June.
Write to Anthony O. Goriainoff at anthony.orunagoriainoff@dowjones.com
(END) Dow Jones Newswires
07-11-24 0044ET
