The latest UK housing market data from the Royal Institute of Chartered Surveyors (RICS) residential market survey and from the latest Halifax House Price Index revealed surprising signs of improvement.
The key messages from these reports were as follows-
• The RICS measure for new buyer enquiries in May climbed to -18%, a significant improvement compared to the previous reading of -34% in April. However, despite a noteworthy turnaround in buyer interest over the past 12 months, the figure still suggests a relatively subdued trend in buyer demand.
• Alongside this, the agreed sales balance rose to -7% in May, also much less negative from figures of -29% and -18% recorded in March and April respectively.
• The national house price balance additional remained in negative territory but still rose to -30% in May, up from –38% in April. This was firmer than expected as the consensus forecast was centred on a net balance of -38%.
• This news chimed with yesterday’s survey of house prices from the Halifax building society. The headline house price index, for example, showed no growth in May, following a decline of 0.4% in April.
• Still, the weaker house price trend in recent months meant that UK house prices experienced their first year-on-year contraction since 2012 with a -1.0% fall in the annual rate of growth in May.