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UK housing market looked muted before Sunak’s new measures: RICS

Mar 11, 2021

LONDON (Reuters) – The slow start to 2021 for Britain’s housing market stretched into February, before finance minister Rishi Sunak announced new measures that could revive a property boom that began after the first COVID lockdown last year, a survey showed on Thursday.

The Royal Institution of Chartered Surveyors said new buyer enquiries remained negative, but by less than in January, and new sellers were put off by ongoing coronavirus restrictions.

RICS’ monthly gauge of house prices rose to +52%, slightly higher than +49% in January and still signalling widespread reports of rising prices and sales were expected to rise modestly over the coming three months.

Other measures of Britain’s housing market have also suggested that activity in the housing market started to fade ahead of the planned expiry of a temporary cut to property purchase tax – known as stamp duty – at the end of March.

But last week Sunak extended the tax break and announced a new mortgage guarantee scheme for first-time buyers who cannot afford large deposits.

Three-quarters of responses to the RICS survey arrived before Sunak’s announcement on March 3.

“The measures announced last week … should help support the housing market over the coming months with concerns around a cliff-edge end to the stamp duty break eased,” said Simon Rubinsohn, RICS chief economist.

“However, a very clear message emanating from the latest survey is that more needs to be done to address the shortfall in supply with price and rent expectations very evidently continuing to accelerate.”

Surveyors expected incomes from rental properties to grow over the coming year with the exception of London, where chartered surveyors expected flat rents.

However, data from property website Rightmove on Wednesday showed renters’ appetite for property in central London and its inner suburbs has jumped on the prospect of life returning to something more like normal as the COVID pandemic recedes.

(Reporting by Andy Bruce; Editing by William Schomberg)