High-rise apartments under construction can be seen in the distance behind a row of residential housing in south London, Britain, August 6, 2021.
High-rise apartments under construction can be seen in the distance behind a row of residential housing in south London, Britain, August 6, 2021. Reuters / HENRY NICHOLLS

British house prices rose at their slowest pace in more than a year last month as buyer demand softened slightly although the overall breadth of price increases remained well above pre-pandemic levels, a survey showed on Thursday.

The Royal Institution of Chartered Surveyors' (RICS) monthly house price balance - measuring the difference between the percentage of surveyors reporting price rises and those seeing a fall - fell to +65 in June from a downwardly revised +72 in May.

This was the index's lowest reading since March 2021, and lower than forecast in a Reuters poll of economists, but still well above the series' long-run average of +13.

"Pricing across much of the housing market remains resilient for now with a shortage of stock continuing to be a feature highlighted by many respondents to the survey," RICS chief economist Simon Rubinsohn said.

Britain's housing market, like that in many other rich nations, boomed during the COVID-19 pandemic as people sought more space to work and socialise at home. Official figures for April showed house prices were 22% higher than in February 2020.

However, analysts are looking at the extent to which a 40-year high in consumer price inflation and rapidly rising Bank of England interest rates will cool the market.

Last month mortgage lender Nationwide said there were "tentative signs of a slowdown", although its rival Halifax reported a 13.0% annual rise in prices for June, the largest since 2004.

RICS said the balance of its members expecting house prices to rise over the next 12 months fell to +37 from +78 in February. Upward pressure on rent, however, was growing.

"A lack of social housing development allied to more onerous changes in the private lettings market is ... leaving the rent expectations metric pointing to further strong growth in the midst of the worsening cost of living crisis," Rubinsohn said.