UK house price growth fast but outlook for budget clouds, RICS survey shows via Reuters
(Reuters) – British house prices rose in October at their fastest pace in more than two years, according to a survey that said on Thursday it was a strong reflection of sentiment ahead of Finance Minister Rachel Reeves’ publication of her budget at the end of the month.
The Royal Institution of Chartered Surveyors said its house price rose to +16 from +11 in September, its highest level since September 2022, when former prime minister Liz Truss’ economic plans sent mortgage markets reeling.
The RICS survey was conducted between Oct. 21 and Nov. 7, and nearly two-thirds of the responses come before Reeves announces the budget on Oct. 30 which contains significant increases in taxes, spending and investment.
Although RICS says the outlook painted by the survey is rosy – with prices expected for the next three months at +20 in October, from +12 in September – that could change.
“The rise in bond yields following the Budget, coupled with the general rise … in interest rate expectations over the past few weeks, is likely to give the market something to deal with in the short term,” said Tarrant Parsons. (NYSE:), head of market analysis at RICS.
The Bank of England cut interest rates last week for only the second time since 2020 and said future cuts are likely to be gradual as it predicts the new government’s first budget will lead to higher inflation and economic growth.
RICS said the picture looks bleak for tenants, as demand is strong but rental properties are disappearing from the market.
Mortgage lenders Halifax and Nationwide both reported monthly increases in home values in October.
