British house prices rose in October at the fastest rate in more than two years, according to a survey on Thursday which mainly reflects sentiment ahead of the publication of Finance Minister Rachel Reeves' budget at the end of the month.
The Royal Institution of Chartered Surveyors (RICS) said the house price balance rose from +11 in September to +16, its highest level since September 2022, when the former prime minister's economic plans Liz Truss shook up the mortgage markets.
The RICS survey was carried out between October 21 and November 7, with two-thirds of responses received before Mr Reeves announced a Budget on October 30 that included big increases in taxes, spending and investments.
Although the RICS said the outlook in the survey was improving – with price forecasts for the next three months at +20 in October, up from +12 in September – the situation could still change.
“The rise in bond yields following the budget, along with the general increase in interest rate expectations over the past couple of weeks, will likely provide a headwind for the market in the near term,” Tarrant said Parsons, head of market analysis at RICS.
Last week, the Bank of England cut interest rates for only the second time since 2020 and said future cuts were likely to be gradual, as it predicted the new government's first budget would see interest rates rise. inflation and economic growth.
RICS said the situation appeared to be worsening for tenants, with demand remaining strong but rental properties disappearing from the market.
Mortgage lenders Halifax and Nationwide both reported a monthly increase in house prices in October.
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