Merryn's Blog

RICS survey shows UK house prices heading down

The RICS housing market survey is arguably the best forward indictor of the country's residential property market. And today it showed that Britain's house prices are dropping for the first time since July 2009.

The Royal Institution of Chartered Surveyors (RICS) housing market survey is a monthly measure of how many surveyors are seeing UK house prices rise compared with the number reporting a fall.

It's arguably the best forward indicator of the country's residential property market.

Subscribe to MoneyWeek

Become a smarter, better informed investor with MoneyWeek.

And today's publication was a bit of a stunner. It showed that Britain's house prices are dropping for the first time since July 2009.

The 'headline price balance' has slipped to 8- i.e. 8% more surveyors are seeing falls than rises.

Advertisement
Advertisement - Article continues below

What's more, the balance of 'new instructions' for sales has hit +33, its highest reading since May 2007.

What does this mean for house prices?

Take a look at this chart

10-08-10-RICS-survey

Source: Bloomberg

The RICS price balance moves in very clear cycles, positive to negative and vice versa. Here we've compared it with the year-on-year percentage change in the Nationwide house price index. And the key point is that we've 'advanced' the RICS survey balance by six months. So the picture rather speaks for itself. It looks very likely that within a few months time, UK house prices will again be falling year-on-year.

Advertisement

Recommended

Visit/516758/beyond-the-brexit-talk-the-british-economy-isnt-doing-too-badly
Economy

Beyond the Brexit talk, the British economy isn’t doing too badly

The political Brexit pantomime aside, Britain is in pretty good shape. With near-record employment, strong wage growth and modest inflation, there is …
17 Oct 2019

Most Popular

Visit/520338/how-much-the-state-pension-will-rise-by-this-year
Personal finance

How much the state pension will rise by this year

While Boris Johnson promised to hold a full budget within 100 days of his election victory, many of the details of next year’s state pension increases…
10 Jan 2020
Visit/520525/currency-corner-how-high-can-the-pound-go-against-the-euro-in-2020
Currencies

Currency Corner: how high can the pound go against the euro in 2020?

In the month in which we should finally leave the European Union, Dominic Frisby takes a look at the pound vs the euro and asks just how high sterling…
13 Jan 2020
Visit/520575/20-predictions-for-the-2020s
Investments

Where will markets be in 2030? Here are 20 forecasts for the 2020s

A lot has changed in the last ten years – stockmarkets soared, technology transformed our lives and politics has changed beyond measure. Here, Dominic…
14 Jan 2020
Visit/520258/running-with-the-crowd-is-bad-for-your-finances-heres-how-to-resist-it
Investment strategy

Running with the crowd is bad for your finances – here’s how to resist it

To be a good contrarian investor, you have to avoid being swayed by the crowd. John Stepek explains how to go about it.
3 Jan 2020