May 14 (Reuters) - Buyers in Britain's housing market stayed downbeat last month as the economic fallout from the Iran war and rising mortgage rates weighed on sentiment, a survey from the Royal Institution of Chartered Surveyors showed on Thursday.
Its headline net balance of house prices fell to -34 from a downwardly revised reading of -25 in March, marking the broadest fall in prices since November 2023. While gauges of new buyer enquiries and price expectations improved slightly in April, they
remained soft.
RICS' readings added to signs of uncertainty in the housing market, with house price gauges from mortgage lenders Nationwide and Halifax pointing in different directions last month.
"Recent warnings from the Bank of England that interest rate rises may be required to tackle renewed inflation, driven by elevated oil prices and disrupted supply chains, underline the challenging environment facing buyers," said Tarrant Parsons, RICS' head of research and analysis.
"Until there is a clearer path for inflation and borrowing costs, activity and sentiment look set to remain subdued, particularly across southern England and London where affordability pressures are most acute," he added.
Financial markets on Wednesday in two to three quarter-point interest rate hikes by the BoE before the end of the year. Investor expectations of BoE interest rates are a major determinant of mortgage rates.
Rents continued to increase rapidly in April, with landlord instructions contracting but by less than in March.
(Reporting by Andy Bruce; editing by David Milliken)
