House prices across the UK are expected to return to growth within the next 12 months after an increase in new property listings and buyer interest, according to an industry poll.
The latest monthly snapshot from the Royal Institution of Chartered Surveyors (Rics) showed property prices stabilised in March after months of decline amid the impact of higher interest rates and the cost of living crisis.
The Rics senior economist Tarrant Parsons said that feedback from its March survey showed demand continued to “recover gradually” across the UK housing market, with new buyer inquiries up for a third month in a row.
“With the inflation backdrop turning a little less difficult of late, this has led to expectations that the Bank of England will be able to start lowering interest rates later in the year,” he said. “In keeping with this, near-term sales expectations point to an improving outlook, albeit the scope for an acceleration in activity will still be relatively limited given mortgage rates are set to remain much higher than in 2020/21.”
Buyer demand continued to rise, according to the survey, with a net balance of +8% of respondents citing an increase in new buyer inquiries in March, in the sharpest increase since February 2022.
On the property supply front, new listings coming on to the sales market increased for a fourth successive month, with a net balance of +13% of respondents noticing a pickup in new instructions in March.
The Rics survey is one of several closely watched indicators of sentiment in the housing market. Earlier this month Halifax said house prices fell by 1%, or £2,908, in March compared with February, while Nationwide reported similar figures.
Official figures show UK house prices have been falling since July 2023, although prices have begun to stabilise in recent months.
Rics said the results of its March survey indicated that house prices “have stabilised at the headline level, with forward-looking metrics suggesting that an upward trend may emerge later in the year”.
“Looking ahead, respondents continue to foresee house prices returning to growth over the next 12 months,” said the report. “What’s more, all parts of the UK are anticipated to see a rise in house prices over the year to come, with sentiment particularly robust in Northern Ireland, London and Scotland.”
