New home buyer enquiries dwindling reports latest RICS survey
Surveyors' trade organisation says although house price rises continue market is clearly softening as buyer numbers cool.
RICS has revealed this morning that house price growth has been stalling as estate agents report fewer buyer enquiries.
The surveying trade body’s latest poll of the property industry for June reveals that new buyer interest slipped for the third successive month, with 27% of respondents reporting a fall in interest from would-be buyers.
Interestingly, London appears to be a little more resilient as +7% of respondents reported an uptick in enquiries in the past month.
RICS says consequently the volumes of sales during June dipped, with more agents reporting a dip in transactions and a similar number expecting the market to soften later this year and next year too.
New stock
But lack of new stock continues to hamper market activity, with the picture across the UK more or less flat regarding new properties being listed for sale.
Moreover, agents report little change in market appraisals compared to this time last year, suggesting the tight supply backdrop is unlikely to change drastically in the short term.
Looking at the competitiveness of the current market, 50% of participants report that average sales prices are coming in above asking prices for properties listed at up to £500k.
“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,” says RICS Chief Economist, Simon Rubinsohn (pictured)
“Although buyer enquiries have predictably slipped a little of late, this needs to be placed in the context of the healthy level of demand in previous months.
Next PM
Jonathan Hale, RICS Head of Government Affairs, UK & Ireland, adds: “Regardless of who is set to become the next PM, and indeed how their cabinet will look, housing needs to be prioritised.
“RICS has long called for planning reform and greater deployment of modern methods of construction to support an increase in housing supply.
Tom Bill (pictured) head of UK residential research, Knight Frank, says: “Mortgage offers made on more favourable terms earlier this year will begin to expire in coming months, meaning buyers may have to reassess their plans.
“Combined with economic news that is going to get worse before it gets better, and the fact supply is rebuilding, downwards pressure on house prices will intensify after the summer. In the unlikely event of a general election this year, both activity and price growth would slow further.”
Jeremy Leaf, (pictured) north London estate agent and former RICS residential chairman, says: “Clearly the property market is not immune from a 40-year-high in inflation and five successive increases in interest rates, which RICS confirms is reducing demand.
“However, we are still seeing considerable interest from buyers, particularly in smaller, correctly-priced family houses.
“Increasingly-stretched buyers are beginning to test the resolve of previously-intransigent sellers, which is resulting in some price softening but no major corrections so far.”
Read the RICS June survey in detail.
The appetite from first time buyers always dwindles by July of any sales year as this group of buyers traditionally flow onto the market during the first two quarters of any year. Last year making up over 400,000 of the sales that completed. With a large slice of their number buying new homes. But, with the BoE talking about 0.5% interest rate rises, on a regular basis to combat inflation, the lending landscape may be very different at the start of 2023, for this group of buyers who also underpin many chains.