20% of professionals expect to see a recovery in home sales over the next three months, marking the highest level of sales expectations since January 2022, the Rics said
UK house sales should get a boost over the next three months amid hopes that mortgage rates will soon begin to drop, shows a survey.
20% of professionals expect to see a recovery in home sales over the next three months, marking the highest level of sales expectations since January 2022, the Rics said.
Economists have predicted that the base rate could be cut from its 16-year high of 5.25% to 5% at the next vote on August 1. In response, the UK’s biggest banks have been reducing mortgage rates in recent days, providing some relief to homeowners and potential buyers.
The newly elected Labour government has voiced a strong commitment to boosting the housing market, aiming to deliver 1.5 million homes over the next five years, a figure not hit since the 1960s.
54% of professionals in the survey expect house prices to be higher in a year’s time, which Rics said highlights a key challenge for the new government, as boosting the supply of homes “will not be an easy task”.
Tarrant Parsons, Rics senior economist, said: Although activity across the housing market remained subdued last month, forward looking aspects did improve slightly.
There are some factors emerging now that could support a recovery in the months ahead, he said.
If the BoE does decide that the current inflation backdrop is benign enough to start easing monetary policy next month, this may prompt a further softening in lending rates, he said.
In addition, the recent election delivered a clear outcome, with housing pushed up the political agenda, he added.
When it comes to the rental market, demand continues to surpass supply despite sharp increases in rent in many parts of the country.
28% of professionals saw a pick-up in tenant demand in June. Meanwhile, 11% saw a decline in new landlord instructions, pointing to a renewed drop in new rental listings.
Looking forward, 38% of professionals expect rental prices to increase over the next three months.