Housing market weakening as demand and sales slide, says RICS

The latest housing market figures suggest there is a weakening in buyer demand and falling sales.

There are also signs the market is set to continue slipping downwards over the next few months, according to the RICS UK Residential Survey.

Property sales, instructions and prices all show a downward trend to end last year.

Alongside this, the number of fresh property listings coming onto the sales market also fell, with the latest net balance of -23% representing the weakest return for this indicator since September 2021.

Agreed sales across the country reported a net balance of -41% among survey participants, indicating a further decline during December.

This downward sales direction became clearer across virtually all parts of the UK over the month, with the North West, Scotland, Wales and London all citing a particularly quiet month.

Pace slowing

In the lettings market, tenant demand increased over December according to a net balance of +28% of contributors. However, this is the lowest reading since February 2021, and suggests that the pace of demand growth is slowing.

On the supply side, new landlord instructions remain on a downward trend, as shown by a net balance of -24% of respondents seeing a decline in December.

“Signs of an easing in inflation pressures more generally could provide a chink of light”

Simon Rubinsohn, RICS chief economist, says: “The latest RICS Residential Survey highlights the emerging challenges in the housing market as new buyers grapple with more costly finance terms and uncertainty over the outlook for the economy.

“This is reflected in forward looking RICS indicators around both prices and activity. However, some signs of an easing in inflation pressures more generally could provide a chink of light particularly for those looking to take their first step on the property ladder.”