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Rics House Price Balance Hits 17-Month Low In October

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(Reuters) - British house price growth slowed sharply in the three months to October to its weakest since May 2013, driven by more widespread price falls in London, a survey by the Royal Institution of Chartered Surveryors showed on Thursday.

RICS said its monthly house price balance fell to +20 in October from +30 in September, its weakest reading since Britain's economy started to pick up more than a year ago and at the bottom end of a range of forecasts by in a Reuters poll.

The drop was driven by a fall in the London index to -35 from -9 in September, representing the most widespread price falls in the capital in four years.

RICS said prices in parts of London were still firm, and that some of the fall was due to worries about increased taxation of luxury properties in the run-up to a national election due in May 2015. The RICS figures fit with broader data showing a slowdown in Britain's housing market, in which house prices were rising at an annual rate of more than 10 percent earlier this year, and by more than 20 percent in London.

"The flatter trend in the market is partly a reflection of potential buyers becoming a little more cautious ... as more stringent lending criteria has made it harder to access mortgage finance," said RICS economist Simon Rubinsohn. "However, with new instructions still flat ... it seems implausible that the dip in demand will result in very much of a decline in house prices," he added.

Lenders have been approving fewer mortgages since regulators required them in late April to make closer enquiries into borrowers' personal finances, and RICS said buyers had also been put off by high prices and the risk of higher interest rates.

Financial markets now expect the Bank of England to keep rates on hold until late next year -- a view that BoE Governor Mark Carney tacitly endorsed on Wednesday when the central bank slashed its inflation forecasts for the next 12 months.

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  • 406 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?

      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%

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