The property sales market is set to continue to suffer with little prospect of a pick-up in the near future, RICS reports this morning.

The latest RICS UK Residential Survey reflects a sales picture with falling prices and buyer hesitancy caused by mortgage upheaval this year.

A survey indicator for house prices nationally last month continued to fall from -55 in July, to -68, marking the most negative reading since 2009.

Declined

New buyer enquiries declined slightly from the -45 posted last time, to -47, with new sale instructions following a similar trend, slipping from -17 in July to -26 this time round.

Survey respondents reported a decline in newly agreed sales, falling from -45 to -47, which marks the weakest reading for this indicator since the Covid pandemic.

Looking ahead, near-term sales expectations remain subdued, although the net balance has turned marginally less negative, at -38%, compared to last month’s reading of -45%.

Flatten

On a twelve-month view, the trend in home sales is anticipated to flatten out, evidenced by the net balance moving from -25% in July to -5% in August.

In the lettings market, conditions remain more positive, with a net balance of +47 of survey respondents noting a rise in tenant demand (+59 in July). However, new landlord instructions fell slightly with a reading of -20 (-19 in July).

Given this mismatch between demand and supply, a net balance of +60% of contributors foresee rental prices being driven higher over the coming three months.

“A sluggish housing market with little sign of any relief in prospect”

Simon Rubinsohn, RICS chief economist, says: “The latest round of feedback from RICS members continues to point to a sluggish housing market with little sign of any relief in prospect.”

He also says there are reports from surveyors that landlords are leaving the market.

Previously, RICS has been more upbeat about prospects in the housing market.

Tom Bill, head of residential research at Knight Frank, says: “Not only have rising mortgage rates taken their toll on house prices but the volatility of the last 12 months has undermined sentiment.

“Buyers and sellers knew interest rates would rise after being close to zero for 14 years, they just didn’t expect it to feel like being strapped into a roller-coaster for the last year,” he says.

“We don’t anticipate a cliff-edge moment for prices, but a single-digit decline this year is likely to be repeated next year.”