The Royal Institution of Chartered Surveyors (RICS) UK house price balance for January was -10%. This was above expectations of -11%.<\/p>\n
A negative balance indicates more survey respondents reported house prices falling than rising. The data point sits close to the forecast range.<\/p>\n
We see the January housing data, while still negative, as a sign that the downturn in the UK property market is losing momentum. The actual figure of -10% is a noticeable improvement over expectations and suggests the worst of the price correction we witnessed through 2025 may be behind us. This lessens the probability of a severe economic shock originating from the housing sector.<\/p>\n
This data should be viewed as supportive for the British Pound, as it reduces the urgency for the Bank of England to implement deep interest rate cuts. With UK inflation proving sticky and finishing last year at 2.9%, this report gives the central bank more room to hold rates steady. We would consider buying GBP call options against currencies where the central bank outlook is more dovish.<\/p>\n
Consequently, interest rate derivative markets may be mispricing the timing and scale of future rate cuts. The rapid rate hiking cycle of 2023-2024 is now history, but a resilient housing market implies the path to easing will be gradual. Selling short-term interest rate futures could be a prudent way to position for a Bank of England that remains cautious for longer than currently anticipated.<\/p>\n
We also see opportunities in UK equity derivatives, particularly those tied to domestic companies like housebuilders and banks. This positive surprise, combined with Bank of England data showing mortgage approvals have now risen for three consecutive months, could trigger a re-rating of the sector. Buying call options on a home construction ETF or futures on the more domestically-focused FTSE 250 index warrants consideration in the coming weeks.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" RICS UK house price balance hit -10% in January, slightly above forecasts, signalling more price falls than rises.<\/p>\n","protected":false},"author":62,"featured_media":17036,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-41652","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\n\n\t\t