RICS House Price Balance

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The RICS Price Balance is an indicator of the estimated monthly change in house prices in the UK. It’s released by the Royal Institution of Chartered Surveyors (RICS). The RICS house price balance is based on views about housing price tendency of a sample size of reviewers based in the UK.

The house price balance figure is measured as the amount of reviewers who reports an increase in housing price minus the proportion of them who reports a decline in prices. A positive net number/figure means that more reviewers are seeing housing price rises than falls. It will imply a strong housing market. While a negative net figure means that more reviewers are seeing housing prices falls than rises. It means there’s a frail housing market. For example, let’s say there are 300 reviewers. 150 of them reported that prices went up, 50 said no changes and 100 said that the prices went down. Herein, we can say that proportionally 50% said higher prices, 33% said lower prices and the net house price balance is +17.

UK Residential Market Surveys

In September 2015, RICS UK Residential Market Survey indicated that the house sales rose up across the nation, with 14% more chartered reviewers witnessing a rise. It’s probably because of a modest improvement in the availability of mortgage finance. This condition continues to climb while stock fall in October 2015. If 44% reviewers reported prices rise in September, in this month 49% reviewers saw the prices rise across the UK.

In November 2015, the survey indicated that house prices continue to climb, especially in East Anglia, the South East and the East Midlands. However, London shows a slow rate of price growth. In the next month, the UK housing market has seen a rise in demand following the government’s latest announcement that stamp duty is set to increase for buy-to-let investors. The survey shows the increase in the demand for new properties. Buy-to-let investors will be asked to pay 3% more in stamp duty charges than the residential buyers looking for the same home. This makes 16% more reviewers said a rise in new buyer enquiries.

In January 2016, the UK Residential Market Survey has observed a climb in new information in the current month. The near-term stress on prices is increasing regardless of a higher level of supply, with buy-to-let investors hastening to get into the market ahead of stamp duty climb. The existing landlords will look to either progressively scale back on their portfolios or exit the market altogether as the more strict rule begins to bite. In February 2016, the UK Residential Market Survey showed that only 17% (net balance) estimated an increase in sales over the coming three months.

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