U.K. Housing Market Shows Signs of ‘Stabilizing,’ RICS Says

By Svenja O’Donnell

June 9 (Bloomberg) -- The U.K. housing market showed signs of “stabilizing” in May as the smallest balance of real-estate agents and surveyors in 18 months reported price declines, the Royal Institution of Chartered Surveyors said.

The number of respondents in the monthly survey saying home values fell exceeded those reporting gains by 44.1 percentage points, the best reading since November 2007, RICS said in a report today in London. Property sales per agent rose to 11.8 in the three months through May, the highest since August 2008.

With Nationwide Building Society and Halifax saying that home values jumped in May, evidence is mounting that the property slump is past its worst. That may help buoy the economy as service industries pick up, pulling Britain out of its worst recession since World War II.

“On the face of it, the housing market does appear to be close to bottoming out with activity picking up in a material way and prices at last stabilizing,” RICS spokesman Ian Perry said in the statement. “However, it is important to remember that the lack of supply has been as important in underpinning prices as the rise in demand.”

The number of properties on agents’ books fell to 58.4 last month, a drop of 35 percent from a year earlier and the lowest since May 2004, RICS said.

The survey showed optimism about future prices is increasing. A net 11 percent of respondents predicted declines, the best result since July 2007, the month before the financial crisis began.

Buyer Confidence

“Buyer confidence is growing daily,” said Luke Pender- Cudlip, an estate agent at Knight Frank in London. “Many think we have hit the bottom of the market.”

Lloyds Banking Group Plc’s Halifax business says that house prices jumped 2.6 percent in May, the most since 2002. Nationwide says they matched the biggest gain since 2006.

Retail sales at stores open least 12 months still fell 0.8 percent in May from a year earlier, the British Retail Consortium said in a separate report today. The economy shrank 1.9 percent in the first quarter, the most since 1979.

The Bank of England kept the benchmark interest rate at 0.5 percent last week and reiterated its plan to spend 125 billion pounds ($200 billion) in newly printed money in U.K. debt markets to aid the economy. The bank said yesterday it may widen the range of assets it’s buying to include secured commercial paper.

To contact the reporter on this story: Svenja O’Donnell in London at sodonnell@bloomberg.net.