(Sharecast News) - The UK housing market remained under pressure in May, a closely-watched industry survey showed on Thursday, as geopolitical tensions continued to subdue consumer confidence.
According to the latest residential market survey from the Royal Institution of Chartered Surveyors, house prices remained in negative territory with a net balance of -35 last month.

Agreed sales were also subdued, with an unchanged balance of -37, while new buyer enquiries were unchanged at -34. It was, however, the first time the balance has not fallen further into negative territory since January.

A balance is the proportion of respondents reporting a rise in prices minus those reporting a fall.

The outbreak of war in the Middle East at the end of February has dented consumer confidence, as energy prices rise and inflationary pressures tick higher. The Bank of England had been expected to continue trimming Bank Rate this year. Instead, policymakers have left the cost of borrowing on hold and made it clear that they stand ready to tackle inflation if need be.

Analysts are now generally pencilling in at least one rise in rates this year.

Looking ahead, and Rics said that respondents remained "cautious" over the short term. While near-term sales expectations improved slightly, at -25 they remain firmly in negative territory, along with price expectations, with a balance of -45.

Longer-term and respondents were more hopeful, however. The 12-month outlook for prices moved into positive territory, at 6, while sales expectations rose to 12.

Tarrant Parsons, head of market research and analysis at Rics, acknowledged that the recent downturn in activity may be beginning to stabilise, as several key indicators had held broadly steady month-on-month.

"However, it would be premature to interpret this as the start of a recovery," he cautioned. "The decline in inflation to 2.8% in April provided some temporary relief, but the Bank of England has signalled that further inflationary pressures are likely as higher energy costs continue to pass through.

"Against this backdrop, the prospect of further rate rises cannot be dismissed and until there is greater clarity, market sentiment is likely to remain fragile."

The survey sample covered 527 branches coming from 210 responses.

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