LONDON – British house price growth slowed slightly last month as a tax break on property purchases neared expiry, but a fall in the number of homes being put up for sale looks set to keep pushing up prices, an industry survey showed on Thursday.
The Royal Institution of Chartered Surveyors said its house price balance fell to +68 in September from a downwardly revised +72 in August, matching economists’ forecasts in a Reuters poll.
Britain’s housing market, like those in many other big economies, has boomed over the past year as the COVID-19 pandemic led to increased demand for properties with more space.
British house prices got an extra boost from a tax break on property purchases which expired at the start of this month.
Mortgage lender Halifax reported last week that prices in September were 7.4% up on the year, including a hefty 1.7% monthly jump, the largest since 2007.
RICS said its members thought prices rises would slow over the next few months. But there was an unusually broad consensus that prices and rents would rise further over the year to come, as fewer homes and rental properties come on to the market.
“Both price and rent expectations (are) close to series highs pointing to greater pressure on affordability at a time when money markets are sensing interest rate increases coming sooner rather than later,” RICS‘s chief economist, Simon Rubinsohn, said.
Investors expect the Bank of England to start raising its main interest rate from a record-low 0.1% before the end of the year.