UK surveyors report weakest house price growth in nearly a year, RICS survey shows

By Suban Abdulla

LONDON (Reuters) -Britain's housing market lost more steam last month as demand faded from buyers after an increase in property transaction taxes in April and concerns mounted about global trade tensions, a survey showed on Thursday.

The Royal Institution of Chartered Surveyors' monthly house price balance - which measures the difference between the percentages of surveyors seeing rises and falls in prices over the past three months - dropped to -8 in May from -3 in April, its weakest since July 2024.

Economists polled by Reuters had forecast a smaller fall to -4.

"Sentiment across the UK residential property market remains somewhat subdued, with ongoing uncertainty around global trade policies and the dampening effect of transactions being brought forward ahead of the Stamp Duty changes at the end of March continuing to weigh on buyer activity," Tarrant Parsons, senior economist at RICS, said.

Thursday's survey chimed with other measures of Britain’s property sector that have pointed to a slowdown, and Bank of England data which showed mortgage approvals dropped to their lowest in more than a year in April.

While property surveyors expect to see a gradual recovery in sales activity over the coming year, Tarrant said the "pace and extend of any improvement" in part depended on whether the Bank of England continues to cut interest rates.

The BoE is expected to hold interest rates unchanged next week. Financial markets were on Wednesday almost fully pricing two quarter-point interest rate cuts by the end of 2025. A Reuters poll of economists published this week also pointed to two such rate cuts.

RICS' gauge of agreed home sales dropped further into negative territory. Its measure of new buyer enquiries fell to a net balance of -26 in May, slightly less downbeat than the -32 in April and March.

(Reporting by Suban Abdulla; editing by David Milliken)