The RICS housing market survey reported improvements in both prices and housing activity, although respondents suggested they expect activity to slow again. The headline net price balance increased to -17 from -24 previously (consensus/BarCap: -25), while the price expectations balance was broadly stable at -21 from -22 previously.

The new buyers enquiries net balance remained flat at 7 and new vendors instruction increased to 10 from 3 previously. With both demand and supply of properties increasing at a modest pace, the balance of newly agreed sales increased from nine to 14, suggesting stronger overall activity. However, respondents indicated they expect the volume of sales to increase at a slower pace with the net balance falling to 5 from 17, the lowest since March.
 
The regional disparity in housing market activity continued. London was the only region reporting a positive net balance for both current prices and price expectations, while the regions with the worse performing housing markets were Yorkshire and Humberside and the West Midlands.
 
The November RICS report indicates a modest improvement in house prices and activity in the UK. However, the balance of news on the UK housing market has been rather mixed in November with the Halifax house price index falling and the Nationwide index indicating an increase in house prices. Owing to the volatility in the data, the MPC looks at the 3m/3m average of the Nationwide and Halifax surveys which reported a fall by 0.2% 3m/3m in November. Beyond these volatile monthly data, the housing market has been broadly flat over the past year as weak demand has been balanced by low supply. Looking ahead, we do not expect to see any significant improvements in the coming months as the deteriorating economic outlook and a weak labour market are likely to weigh on housing demand.  
 

source: BarCap