According to a recent industry survey, the housing market in Britain displayed signs of slowing down in June. The survey, conducted by the Royal Institution of Chartered Surveyors (RICS), revealed that property surveyors anticipate continued subdued activity due to higher borrowing costs impacting new buyer enquiries.
In the poll, RICS members reported a net balance of -45, indicating a decline in new buyer enquiries compared to -20 in May. This June reading represents the most negative figure since October of the previous year when former Prime Minister Liz Truss's "mini-budget" economic plan had a similar impact with a -51 rating.
Various factors contribute to the pressures faced by Britain's housing market, including weakening buyer demand, declining house prices, rising mortgage rates, and the Bank of England's efforts to control persistent inflation.
Financial markets are anticipating that the Bank of England (BoE), which has been consistently raising interest rates since December 2021, will further increase its bank rate to 6.25% by the end of this year, up from the current rate of 5%.
The Royal Institution of Chartered Surveyors (RICS) reported a decline in its gauge of agreed sales, reaching a net balance of -34 in June, a significant drop from -8 in May and the lowest level in six months. Additionally, RICS' house price balance decreased to -46 in June compared to -30 in May. Analysts surveyed by Reuters had expected a reading of -34 for this indicator.