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Britain’s housing sector continues to weaken, as rising interest rates hit demand for property, the country’s surveyors are warning today.
The Royal Institution of Chartered Surveyors (Rics) has reported the most widespread falls in British house prices since 2009 in the last month.
Tighter lending environment continues to weigh heavily upon homebuyer activity, Rics says.
But there may be relief around the corner, with several major lenders cutting their mortgage rates this week.
The latest survey of Rics members, for July, found the following.
• House inquiries and sales continued to decline.
• House prices fell for a further month.
• Near-term market expectations remained negative.
• Rental demand continued to rise along with expected rental prices.
Rics’ house price balance, which measures the difference between the percentage of surveyors reporting price rises and falls, dropped to -53 in July from a downwardly revised -48 for June.
That is a larger fall than expected, and the lowest reading since April 2009.
Some of Britain’s biggest lenders have cut rates on their fixed mortgage deals, easing some of the pressure on hard-pressed homeowners.
Halifax, part of Lloyds Banking Group – the UK’s biggest mortgage lender – is reducing rates by up to 0.71 percentage points from Friday. That means a five-year fixed rate currently priced at 6.10% will be offered at a rate of 5.39%.
It also emerged that average rates on new two- and five-year fixed mortgages have fallen slightly.
Mortgage rates have risen rapidly as the Bank of England has pushed up interest rates in an attempt to tame inflation. Last week the Bank raised interest rates for the 14th consecutive time, bringing the base rate to 5.25%.
The financial markets are eager to scrutinise the latest US inflation report, due at 1.30pm UK time.
Economists predict that US CPI rose to 3.3% in the year to July, up from a two-year low of 3% in June. That could create concerns that the drop in American inflation has bottomed out.
Asia-Pacific markets have dropped, amid anxiety after the White House announced a ban on US investment in Chinese technology.
The executive order signed by Joe Biden authorises the US treasury secretary to prohibit or restrict certain US investments in Chinese entities in three sectors: semiconductors and microelectronics, quantum information technologies, and certain artificial intelligence systems.
The agenda
• 9am BST: Italian inflation report for July
• 9.30am BST: weekly UK economic and business activity report from the ONS
• 11am BST: Ireland’s inflation report for July
• 1.30pm BST: US inflation report for July
• 1.30pm BST: US weekly jobless data
We’ll be tracking all the main events throughout the day ... |
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