January 16, 2020 / 12:04 AM / a month ago

UK housing market gets a boost from election - RICS

LONDON (Reuters) - Britain’s housing market got a boost from Prime Minister Boris Johnson’s big election win in December which cleared up some of the uncertainty that has hung over the economy, at least for now, a survey showed on Thursday.

FILE PHOTO: Terraced houses are seen in Primrose Hill, London, Britain September 24, 2017. REUTERS/Eddie Keogh/File Photo

Agreed home sales rose for the first time since May and expectations of future sales both jumped, according to the report by the Royal Institution of Chartered Surveyors (RICS).

“Whether the improvement in sentiment can be sustained remains to be seen given that there is so much work to be done over the course of this year in determining the nature of the eventual Brexit deal,” RICS Chief Economist Simon Rubinsohn said.

Johnson says he will not ask the European Union for an extension to a no-change transition period that is due run from Britain’s departure from the bloc on Jan. 31 until the end of 2020, raising the prospect of more Brexit tension if a trade deal is not done with Brussels before the deadline.

“However, the sales expectations indicators clearly point to the prospect of more upbeat trend in transactions emerging with potential purchasers being more comfortable in following through on initial enquiries,” Rubinsohn said.

Britain’s housing market, along with the broader economy, has slowed since the 2016 Brexit referendum vote.

But in December, the monthly RICS house price balance rose to -2, its highest since June, from -11 in November.

A rebound in the market in London and neighbouring southeastern England pushed up new instructions for home sales at a national level.

The housing market in the capital has been particularly hard hit by worries about Brexit in recent months, as well as higher taxes on expensive properties.

The improvement in the RICS survey echoes other early signs of a pick-up in confidence among British consumers and companies.

However, several officials from the Bank of England, including Governor Mark Carney, have said interest rates might need to be cut if the overall economy remains weak.

The RICS survey was sent to members on Dec. 20, eight days after the election.

Reporting by William Schomberg, editing by Andy Bruce

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