Britain's housing market slowed in May as the outlook for imminent rate cuts by the Bank of England (BOE) dimmed, causing a decline in both buyer demand and house prices, according to a survey by the Royal Institution of Chartered Surveyors (RICS) released on Wednesday. The RICS' net balance for house prices dropped to -17, down from a revised -7 in April, the lowest level since January. Recent stronger-than-expected inflation in Britain and the US has led investors to delay their expectations for BoE rate cuts to late 2024, affecting mortgage rates offered to new buyers. Consequently, RICS' measure of new buyer inquiries fell to -8 in May from -1 in April, the lowest since November. Housing affordability remains a critical political issue ahead of the July 4 national election, with house prices up around 20 per cent since December 2019. Both Prime Minister Rishi Sunak's Conservative Party and the opposition Labour Party, leading in polls, have pledged to increase house-building if elected. RICS senior economist Tarrant Parsons noted that the recent recovery in the UK housing market has stalled, with higher mortgage rates dampening buyer demand. However, expectations suggest this is a delay rather than a derailment of a modest improvement in the market, with a robust increase in sales activity projected over the next 12 months. Attribution: the Royal Institution of Chartered Surveyors (RICS), Reuters.
