(Bloomberg) -- The UK housing market is showing signs of picking up after the Bank of England cut interest rates, according to the Royal Institution of Chartered Surveyors.
Buyer demand and sales rose in August, with estate agents anticipating a further improvement in the final quarter of the year. Meanwhile, a gauge of annual house-price growth turned positive for the first time since October 2022.
Mortgage rates continued to ease after the BOE cut rates for the first time since the pandemic on Aug. 1, making buying a home more affordable. Money markets are pricing about another two reductions by the end of the year.
“The latest RICS survey captures an improvement in sentiment over the past month in the wake of the modest decline in mortgage rates with buyer interest improving, albeit from a relatively low base, and stock levels edging up,” said Simon Rubinsohn, chief economist at RICS.
However, he stressed that “realistic pricing” remains key to getting deals done, with the scope of further interest-rate cuts unclear and households braced for tax rises in the first budget of the new Labour government on Oct. 30.
The picture painted by RICS chimes with a recent report from Halifax showing house prices rising to within a whisker of a record high last month. However, rival mortgage lender Nationwide Building Society said prices fell on the month.
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