Proactive Investors - UK house prices dropped last month and are predicted to continue falling as a survey noted a decline in buyer demand for the 11th consecutive month.
Enquiries from new buyers showed a balance of -29% of surveyors reporting falling demand over those reporting rising demand, according to the monthly Royal Institution of Chartered Surveyors’ (RICS) review.
The balance in March was little changed from the -30% reading the previous month.
House prices continue to retreat, with a net balance of -43% of surveyors reporting a decline, with surveyors in East Anglia, the South East, the West Midlands and London reporting the most significant price declines.
House prices expectations in the near term remain downbeat, with a net balance reading of -49% compared to -53% last month.
A rare glimpse of light for the sector was that the current house price balance improved from -47% in the prior month, the first improvement since April 2022.
Moreover, the house price outlook over the next 12 months improved to -24%, which was the least negative reading since September and was broadly flat in London, while contributors based in Northern Ireland, Scotland and Wales envisage a rise in house prices.
But in the here and now, agreed sales also continue to decrease and are expected to continue declining for some months.
The balance of agreed sales subsided to -31% in March from -25% for February and RICS members expect sales to remain under pressure over the next few months, with a net balance of -29%.
However, again this was less downcast than the reading of -45% from the month before and continues a softening of the negativity in near-term sales expectations in each of the past three reports.
Looking 12 months forward, the net balance for sales expectations came in at +1%, representing the first time this measure has been out of negative territory since March 2022.
RICS chief economist Simon Rubinsohn said “caution” remained the overall tone.
“Deals are being done, but a theme coming through in the anecdotal remarks is the need for vendors to recognise the shift in market dynamics. Significantly, there is also a sense that the medium-term outlook is looking a little more settled, helped by the perception that the interest rate cycle may be near the peak,” he said.
Shares in housebuilders and estate agents were mostly higher in London on Thursday, with Barratt Developments (LON:BDEV) PLC up 2.52%, Bellway (LON:BWY) PLC up 3.48%, Redrow PLC (LSE:LON:RDW) up 3.84%, Savills (LON:SVS) PLC up 1.11% and Foxtons (LON:FOXT) Group PLC up 0.26%, while Persimmon (LON:PSN) PLC fell 1.72%.