Pause in the UK property market
The housing price index in the United Kingdom, developed by The Royal Institution of Chartered Surveyors (RICS), remained unchanged in May at 34%, compared to April.
A month earlier it fell by nine percentage points to the lowest level since November 2023, ending a three‑month downtrend.
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The number of estate agents reporting falling prices again exceeded the number of those who recorded increases.
The report shows that the UK housing market last month remained weak, with buyer demand and the number of sales transactions staying at a negative level.
At the same time the rental market remained tight due to limited supply of homes.
"The market situation in May remained difficult, although some indicators suggest that the recent downturn may be starting to stabilise," the report said.
The time to sell a home has lengthened and now averages 21,5 weeks, the longest since data collection began in 2017.
Importantly, the RICS index at -45% suggests that most respondents expect further price declines in the next three months.
At the same time a result of +6% means that some respondents expect stability or a slight price increase over the year.
"The latest survey data indicate that the recent slowdown in economic activity may be starting to stabilise, and several key indicators remain essentially unchanged. However, because these indicators are still in the negative zone, it would be premature to interpret this as the start of an economic revival", said Tarrant Parsons, director of research and market analysis at RICS.
As Stan Shaw, an RICS member from Mervyn Smith noted, "There is an obvious stalemate in the market, where too many sellers still wait for a price that is no longer attainable, and supply is rising."
"On the other hand, when new properties appear on the market at the right price, buyers are eager," he added.
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Stalemate in a key economic sector in the hands of the Bank of England
Interest rates in the United Kingdom were kept unchanged by the Bank of England's latest decision at 3,75%.
Source: Trading Economics.
Nevertheless, officials, according to assurances, are ready to take action to curb potential inflation growth.
"The drop in CPI inflation to 2,8% in April brought temporary relief, but the Bank of England signalled that further inflationary pressures are likely as higher energy costs continue to be passed on to prices," Tarrant Parsons said, quoted in the RICS report.
"In this situation, the prospect of further rate hikes cannot be ruled out, and until the situation becomes clearer, market sentiment will likely remain unstable," he added.
Source: Trading Economics.
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Source: The Royal Institution of Chartered Surveyors.
