UK house prices gained momentum last month, moving out of negative territory for the first time since lockdown began as the government’s stamp duty holiday motivated buyers.
However the bounce is not expected to last long, as government support schemes wind down in the winter.
UK house prices firm up
Across the UK in aggregate, a net balance of 12 per cent of respondents to the Royal Institution of Chartered Surveyors’ monthly survey reported an increase in house prices during July.
This was a noticeable turnaround from minus 13 per cent in June, as UK house prices rose in virtually all regions.
London was the sole exception, however, where a net balance of minus 10 per cent of respondents cited a decline. It was still significantly less negative than the minus 54 per cent reading posted in June.
Overall a net balance of eight per cent of contributors said they expect UK house prices to increase over the next 12 months.
That makes this latest reading consistent with a flat to marginally positive outlook for house prices in the year ahead, RICS said.
Buyers and sellers
As new buyers flooded into the market, 75 per cent of survey participants noted an increase in interested buyers over the month of July, marking the second consecutive month in which demand has rebounded firmly.
Alongside this, 57 per cent of respondents nationally saw a rise in agreed sales in July across all parts of the UK.
RICS said this was indicative of a strong uptick in transaction levels, even as UK house prices strengthened, following hefty declines a few months ago.
Respondents predicted continued growth in sales over the next three months, as 26 per cent of contributors anticipated an increase.
However, further out, yearly sales projections remain negative as government support schemes which have been aiding people’s finances come to an end.
A net balance of minus 10 per cent of respondents foresee sales tailing off over the year ahead, with concerns about the prospects for the UK economy.