Buyer interest holds steady despite higher rates
The UK housing market continued to show resilience in November, according to the latest RICS Residential Market Survey, with house price growth gaining further momentum despite the challenges of higher mortgage interest rates.
The survey’s national house price indicator, measured by net balance, climbed to +25% in November, up from +16% in October. This marks the fourth consecutive monthly increase, reinforcing the steady recovery in house price growth observed since mid-2024.
Respondents to the survey also expressed confidence in the market’s future, expecting prices to rise over the next three and twelve months.
Buyer demand maintained an upward trajectory, with new buyer enquiries recording a net balance of +12%, nearly unchanged from October. This reflects a modest but consistent recovery in activity from prospective homebuyers.
Sales volumes, however, were largely flat in November, with a net balance of +1%, compared to +8% in the prior month. While the near-term outlook for sales remains positive, the RICS November survey revealed slightly lower optimism among respondents, with 19% expecting sales to increase in the next three months — down from October’s more optimistic forecast.
On the supply side, new property listings rose for the fifth month in a row, recording a net balance of +17%. Yet, market appraisals — a key indicator of future listings — remained level with figures from a year ago, suggesting a potential slowdown in new supply heading into 2025.
In the lettings market, tenant demand dipped slightly for the first time since 2020, with a net balance of -1%. The decline may be linked to seasonal factors, as the November data is not seasonally adjusted.
“Although the latest survey results continue to signal a steady improvement in buyer demand across the residential market, the broader macro environment is likely to pose additional headwinds moving forward,” said Tarrant Parsons (pictured left), RICS head of market analytics.
“Most significantly, the recent rise in mortgage interest rates may curtail the recovery in market activity before long, and this is reflected in the slightly less optimistic sales expectations data coming through this month.
“Moreover, measures of consumer and business confidence across the economy have deteriorated of late and, if sustained, this could begin to feed through into housing market conditions in the months ahead.”
There continue to be indications of a good level of confidence in the market, according to Tomer Aboody (pictured right), director of specialist lender MT Finance.
“Both sellers and buyers are pushing to transact, as affordability is improving,” Aboody said. “While the Budget is now behind us, its full impact has yet to be felt. However, we are hopeful that this confidence in the market continues, with further rate cuts expected in the new year and buyers and sellers perceiving it to be a good time to transact.”
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