The recovery of Britain’s housing market risks being hampered by recent mortgage rate increases and broader macroeconomic uncertainty, a survey on Thursday showed.
According to the Royal Institute of Chartered Surveyors (RICS), house prices grew for a fourth consecutive month in November, with its survey showing a net balance of 25% of respondents reported an uptick, against 16% in October.
New buyer enquiries remained positive with a largely unchanged reading of 12%, but the net balance of respondents highlighting higher agreed sales volumes fell from 8% to 1%.
The net balance anticipating an uptick in sales activity ahead also moderated, RICS said.
“Although the latest survey results continue to signal a steady improvement in buyer demand across the residential market, the broader macro environment is likely to pose additional headwinds moving forward,” analytics head Tarrant Parsons stated.
“Most significantly, the recent rise in mortgage interest rates may curtail the recovery in market activity before long, and this is reflected in the slightly less optimistic sales expectations data coming through this month.”
Tenant demand for rentals declined in the meantime, RICS added, while landlord instructions continued to fall, indicating “imbalance between supply and demand”.
“Moreover, measures of consumer and business confidence across the economy have deteriorated of late and, if sustained, this could begin to feed through into housing market conditions in the months ahead,” Parsons added.