UK housing market bouncing back post Brexit, RICS suggests

Confidence in the UK housing market has recovered moderately from its post-Brexit wobbles, surveyors reported on Thursday, but numbers of both buyers and sellers remained in negative territory.

The August residential housing market survey from the Royal Institution for Chartered Surveyors (RICS) reported a slight increase in its past-price indicator after falling for five months in a row, with a balance of 12% more surveyors reporting an increase in prices, up from 5% previously.

But while other measures improved, most remained weak.

RICS found the balance of buyer enquiries ticked up to -7 in August from -25 in July, while the new sales instructions balance rose to -5 from -30.

The balance of newly agreed sales improved to around zero from -32.

Expectations improved such that, for the first time since April, there was a positive balance of surveyors expecting prices and sales volumes to rise three months from now, while 12-month expectations of price and sales gains picked up to 35.8% and 29.5%, from 22.5% and 13.3% respectively.

"The real shortage of property for sale remains an overriding feature of the market and also a key factor supporting prices," the report authors said.

"This looks set to persist for a while yet as new instructions to sell declined once again during August,albeit only marginally. As a result, average stock levels on estate agents books slipped for the third successive month and now stand within a whisker of the record low posted in December of last year."

Property specialist Hansen Lu at Capital Economics was encouraged by the rate of slowdown in number of new buyers and sellers easing notably and that more surveyors are reporting rising prices but that the market was still some distance from a return to normal.

"In all, the data suggest that uncertainty following the Brexit vote is wearing off. That is consistent with the recent improvements in the economic data. Importantly however, many of the survey measures are still weak by past standards.

"And improvements in the RICS data tend to lead measures of house prices and transactions by several months. As a result, we still expect subdued activity and price growth until at least the end of the year."