The UK housing market recovered further in August, the RICS By Reuters survey shows

LONDON (Reuters) – Britain’s housing inspectors expect sales to continue rising in the coming months after an indicator of house prices turned positive for the first time in nearly two years, although concerns about affordability remained despite the reduction loan costs.

The Royal Institution of Chartered Surveyors said on Thursday that its main house price balance sheet, which measures the difference between surveyors who see house prices falling and rising, has moved into positive territory for the first time since October 2022.

The balance of house prices rose to +1 in August from -18 in July and well above the forecast of -14 economists in a Reuters poll. A measure of expected sales over the next three months was the strongest since January 2020, before the COVID-19 pandemic hit Britain.

Other indicators of the UK housing market indicated increased momentum in the sector following a recent fall in interest rates.

Data from mortgage lender Halifax showed house prices rose at their fastest annual pace since the end of 2022 in August, although rival Nationwide said prices fell 0.2% month-on-month in August, the first monthly decline since April.

Simon Rubinsohn, chief economist at RICS, said there was some uncertainty about the prospect of a rate cut by the Bank of England and the upcoming budget.

“Affordability remains an issue in the sales market, even with somewhat cheaper financing now available, but the picture looks even more acute in the rental market, where rental stock continues to decline.”

British Chancellor of the Exchequer Rachel Reeves will present her spending and tax plan on October 30.

The BoE is expected to keep interest rates on hold on September 19 after cutting borrowing costs for the first time last month from a 16-year high of 5.25%.

RICS’ monthly survey also showed an improvement in overall sentiment and buyer interest. Its measure of new buyer inquiries rose to a net balance of +15 last month from +4 in July, the highest since October 2021.

The net balance of agreed house sales in the UK also increased, with respondents seeing an increase in the number of properties on the market.