LONDON (Reuters) – Britain’s housing market had its slowest month in more than a year in February as a rush by buyers to close deals ahead of the expiry of a tax break ran out of steam, a survey published on Thursday showed.
The Royal Institution of Chartered Surveyors said buyer demand was the weakest since November 2023 and a further softening was expected in the months ahead.
The report’s net balance of house prices – which measures the difference between surveyors reporting a rise and a fall -dropped to +11 – its lowest since September last year – down from +21 in January and a two-year high of +25 in December.
The figure was below all forecasts in a Reuters poll of economists which had pointed to only a slight slowdown.
Britain’s housing market gathered speed in recent months, helped by expectations of Bank of England interest rate cuts and by buyers seeking to beat a March 31 expiry of tax breaks for purchases of less expensive homes and for first-time buyers.
But that flurry of activity appears to have cooled now with time almost running out to beat the deadline.
RICS Chief Economist Simon Rubinsohn linked the slowdown to the expiry and to worries about inflation pressures caused by global uncertainty, which has spiked since Donald Trump took over as U.S.
president.
“That said, looking beyond the next few months, sales activity is seen as likely to resume an upward trend with prices also moving higher,” Rubinsohn said.
In the property rentals market, tenant demand contracted for a fourth month in a row, the longest such stretch since collection of the figures began in 2012.
But a net balance of +34% of survey participants expected rents to rise in the coming three months as the flow of properties coming on to the market dries up more quickly than demand.
Prime Minister Keir Starmer has promised to speed up house-building to help tackle the shortage of homes in Britain.
(Writing by William Schomberg; editing by David Milliken)
