British property surveyors grew less gloomy about the prospects for the housing market in February as a slump in new buyer enquiries eased, but reports of falling house prices hit a 14-year high, a survey showed on Thursday.
The Royal Institution of Chartered Surveyors (RICS) house price balance, which measures the difference between the percentage of surveyors seeing rises and falls in house prices, fell to -48 in February from -46 the previous month – the lowest reading since April 2009.
New buyer enquiries rebounded to a net balance of -29 in February, up from -45 in January.
While Thursday’s survey still showed the housing market firmly in decline, some measures indicated that a more stable picture was emerging in 2023, RICS said.
Tarrant Parsons, senior economist at RICS, said he expected housing market activity to remain subdued over the coming months.
“Given the ongoing weakness in demand, house prices remain on a downward trajectory, and are expected to see further falls through the first half of the year at least,” Parsons said.
Britain’s housing market cooled in recent months, hurt by a dent in demand for new homes as higher mortgage rates and a surge in the cost of living deterred would-be buyers.
Major British housebuilders Persimmon (PSN.L) and Taylor Wimpey (TW.L) flagged challenges from the slowdown in the property sector, hitting profit margins and building targets.
However the Halifax house price index on Tuesday showed an unexpected jump in prices last month, potentially reflecting improvements in mortgage rates and consumer confidence.
In contrast, another lender, Nationwide, last week said house prices dropped by the most in more than 10 years in February.
Looking at the year ahead, RICS’s balance for price expectations rose from January, but remained negative.
Its measure of newly agreed sales was also less negative than in January, improving from a net balance of -36% to -26%.
The average time taken to complete sales rose close to 19 weeks.