UK housing market 'subdued' as potential buyers lose interest

Economists expect home price growth to cool this year as accelerating inflation erodes household incomes and Brexit uncertainty clouds the economic outlook.
Economists expect home price growth to cool this year as accelerating inflation erodes household incomes and Brexit uncertainty clouds the economic outlook.PHOTO: REUTERS

LONDON (BLOOMBERG) - Demand for UK housing dropped to a six-month low in February, according to the Royal Institution of Chartered Surveyors.

A measure of enquiries from potential buyers fell to 0 from 3 in January, RICS said in its monthly survey of real-estate agents published on Thursday (March 9). A gauge of instructions from sellers also declined, remaining below zero for an 12th month.

Economists expect home price growth to cool this year as accelerating inflation erodes household incomes and Brexit uncertainty clouds the economic outlook. RICS said buyer interest had "failed to see any meaningful growth since November" and key activity indicators "remain subdued."

"New buyer enquires seem to have gradually lost steam over the past few months," the property group said in an emailed report. "Near-term expectations remain positive but point to a relatively modest rise in activity in the months to come."

RICS's headline price index was unchanged at 24 in February, with momentum in London deteriorating for the fourth month. Surveyors have now reported falling values in the capital for the past year, RICS said.

Tight supply across the majority of UK regions saw the average stock per surveyor near a record low, it said.