LONDON (REUTERS) - Britain's housing market showed signs of a slowdown in May as fast-rising inflation and higher interest rates tightened the financial squeeze for many households, according to a survey published on Thursday (June 9).
The Royal Institution of Chartered Surveyors (RICS) said its new buyers gauge fell to minus seven from plus 8 in April, the first time it turned negative in nine months.
"The increase in the cost of mortgage finance alongside growing concerns about the economic outlook is unsurprisingly having an impact, albeit a relatively modest one at this point," RICS chief economist Simon Rubinsohn said.
The Bank of England has raised interest rates four times since December and is expected to do so again next week, taking the bank rate to 1.25 per cent, despite a weak outlook for economic growth.
The Organisation for Economic Cooperation said on Wednesday that Britain's economy would grow by 3.6 per cent this year before flatlining at 0 per cent next year, the weakest forecast for 2023 among all countries in the Group of 20 major economies, with the exception of Russia.
RICS said expectations for residential property sales over the next three to 12 months deteriorated after showing little change in May.
Prices were propped up by the longstanding shortage of properties coming onto the market.
RICS said there was a difference of plus 73 percentage points between the proportion of surveyors reporting rising prices and those reporting a fall. That was down from minus 80 in April but was in line with the average over the last six months.
A Reuters poll of economists had pointed to a smaller fall to plus 76.
Further ahead, a net balance of plus 42 saw house prices being higher in a year's time, the weakest reading since January 2021.
Data published on Wednesday by mortgage lender Halifax showed that the annual pace of house price increases in Britain slowed in May for the third month in a row.