UK Housing Market Activity Continues to Rise Into October: RICS
Arslan Butt • 1 min read
A recent survey by the RICS reveals that the UK housing sector continues to strengthen into October as the measure for growth in house prices rose to the highest level seen in 21 years. The RICS house price index soared to 68 in October from 62 in September, beating economists’ forecast for a dip to 55 instead.
This is the highest reading for this index seen since September 1999 and indicates that the housing market activity continued to grow since the first round of lockdown from earlier this year due to the coronavirus pandemic. The higher levels of activity were driven by pent-up demand, rising interest among consumers for bigger homes, and a temporary stamp duty holiday.
Housing sales expectations for the next year, however, remain pessimistic, even though they have picked up slightly since September. With a rise in unemployment and the latest round of lockdowns due to a resurgence in fresh cases, the British economy is expected to remain under pressure for a longer than expected time, which could dent this recent optimism in the housing market.
Chief economist at RICS, Simon Rubinsohn, remarks, “However, there is understandably more caution about activity looking beyond the first quarter of 2021. Aside from the withdrawal of government incentives, the market may also find the more challenging employment picture a significant obstacle even with interest rates set to remain close to zero for some time to come.”