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U.k. housing market activity rebounds slightly in April, sentiment likely to be subdued in near term

U.k. housing market activity rebounds slightly in April, sentiment likely to be subdued in near term

 

The RICS Residential Market survey showed that U.K. housing market activity rebounded a bit in April. The survey’s main indicators for supply, demand and the level of transactions all moved close to the neutral level of zero, having recorded relatively sharp falls in the earlier months. However, price pressures fell further, with the headline indicator falling to -8 percent, the lowest level on the survey since November 2012.

Looking at the details, London and the South East continued to be the main source of weakness, and in other regions price pressures continued to be stronger, with Scotland and Northern Ireland, for example, recorded marked rises. The survey also emphasized that middle and upper segments of the housing market seem to have fared worse than cheaper properties with prices GBP 500k or less, noted Daiwa Capital Market Research.

The survey respondents had anticipated prices to remain weak in the coming three months; however, longer-term expectations continued to be relatively positive.

“We also envisage no meaningful recovery in the near term, not least given that the weaker economic backdrop in general and subdued consumer confidence will likely keep housing market sentiment subdued”, stated Daiwa Capital Market Research.

However, more considerable falls in prices at the national level also seem unlikely, as, against the backdrop of very low jobless rate and slightly stronger earnings growth, there should be quite a few forced sellers in the market.

At 21:00 GMT the FxWirePro’s Hourly Strength Index of British Pound was neutral at -28.6117, while the FxWirePro’s Hourly Strength Index of US Dollar was slightly bullish at 51.8326.

Source: FXWire Commentary

 

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