According to a study released on Thursday, the property market in Britain had its most significant price drops since 2009 last month as a result of the ongoing trend of interest rate increases over the previous year.
The Royal Institution of Chartered Surveyors’ (RICS) house price balance, which gauges the difference between surveyors’ perceptions of price increases and decreases, dropped from -42 in December to -47, the lowest reading since April 2009.
Another indicator of buyer interest decreased to -47, which is the lowest level since October of last year.
According to RICS’s senior economist, Simon Rubinsohn, surveyors continue to report a generally muted market climate.
But considering that recent macro estimates from the Bank of England and others are now anticipating a less difficult economic situation this year, Rubinsohn added, “it is uncertain how much downside to pricing there is likely to be.”
The BoE predicted last week that the British economy will likely enter a recession in early 2023 and not emerge until early 2024, which would be a shorter period of contraction than in its previous set of projections.
A gauge of predicted sales over the next 12 months improved to -20 from -42 in the RICS report, indicating surveyors are less pessimistic about the prospects than they were in December.
Following the rise in demand seen during the coronavirus outbreak, other housing market indicators have also recently demonstrated a loss of momentum.
In November, Reuters surveyed economists and analysts who expected that after rising by 28% since the pandemic began in 2020, housing values will decline by about 5% this year.
According to RICS, despite a lack of available inventory, the rental market continues to see considerable interest from potential renters.