Calendar An icon of a desk calendar. Cancel An icon of a circle with a diagonal line across. Caret An icon of a block arrow pointing to the right. Email An icon of a paper envelope. Facebook An icon of the Facebook "f" mark. Google An icon of the Google "G" mark. Linked In An icon of the Linked In "in" mark. Logout An icon representing logout. Profile An icon that resembles human head and shoulders. Telephone An icon of a traditional telephone receiver. Tick An icon of a tick mark. Is Public An icon of a human eye and eyelashes. Is Not Public An icon of a human eye and eyelashes with a diagonal line through it. Pause Icon A two-lined pause icon for stopping interactions. Quote Mark A opening quote mark. Quote Mark A closing quote mark. Arrow An icon of an arrow. Folder An icon of a paper folder. Breaking An icon of an exclamation mark on a circular background. Camera An icon of a digital camera. Caret An icon of a caret arrow. Clock An icon of a clock face. Close An icon of the an X shape. Close Icon An icon used to represent where to interact to collapse or dismiss a component Comment An icon of a speech bubble. Comments An icon of a speech bubble, denoting user comments. Ellipsis An icon of 3 horizontal dots. Envelope An icon of a paper envelope. Facebook An icon of a facebook f logo. Camera An icon of a digital camera. Home An icon of a house. Instagram An icon of the Instagram logo. LinkedIn An icon of the LinkedIn logo. Magnifying Glass An icon of a magnifying glass. Search Icon A magnifying glass icon that is used to represent the function of searching. Menu An icon of 3 horizontal lines. Hamburger Menu Icon An icon used to represent a collapsed menu. Next An icon of an arrow pointing to the right. Notice An explanation mark centred inside a circle. Previous An icon of an arrow pointing to the left. Rating An icon of a star. Tag An icon of a tag. Twitter An icon of the Twitter logo. Video Camera An icon of a video camera shape. Speech Bubble Icon A icon displaying a speech bubble WhatsApp An icon of the WhatsApp logo. Information An icon of an information logo. Plus A mathematical 'plus' symbol. Duration An icon indicating Time. Success Tick An icon of a green tick. Success Tick Timeout An icon of a greyed out success tick. Loading Spinner An icon of a loading spinner.

House prices ‘moving firmly upwards despite falls in new buyer inquiries’

Surveyors have seen the longest stretch of shrinking buyer demand in the housing market since the early stages of the coronavirus pandemic (Andrew Matthews/PA)
Surveyors have seen the longest stretch of shrinking buyer demand in the housing market since the early stages of the coronavirus pandemic (Andrew Matthews/PA)

Surveyors have seen the longest stretch of shrinking buyer demand in the housing market since the early stages of the coronavirus pandemic.

Despite this, house prices continue to move firmly upwards and are still expected to be higher in a year’s time, according to the Royal Institution of Chartered Surveyors (RICS).

A net balance of 25% of property professionals reported new buyer inquiries falling rather than rising in July, marking the third month in a row of an overall decline.

The RICS report said: “As such, this marks the third successive report in which this indicator has been in negative territory, thereby representing the longest stretch of falling demand seen since the early stages of the pandemic.”

The previous stretch of falling demand took place in March, April and May 2020.

A dip in new buyer inquiries was seen across the UK generally over the latest survey period.

Expectations among property professionals for sales in the next 12 months were the most downbeat since March 2020 – the month that the UK coronavirus lockdowns started.

Higher interest rates and the cost-of-living crisis were cited by contributors to be causing the drop in market activity.

The latest survey was carried out before the most recent Bank of England rate hike last week, which was the biggest single rate jump since 1995, which according to calculations by UK Finance adds around £50 per month onto the cost of the average tracker mortgage outstanding.

A lack of stock, however, is continuing to put an upward pressure on house prices.

A net balance of 63% of surveyors reported an increase in house prices during July rather than a decline, and while this is more moderate than a recent high of 78% in April, it is comfortably above the long-term average and indicates a firmly upward trend, RICS said.

Looking further ahead, while price expectations for the 12 months ahead have eased, the latest survey findings still indicate that house prices will be higher in a year’s time than they are now,

In the lettings market, meanwhile, tenant demand continues to rise, with a net balance of 36% of property professionals reporting an increase.

With new landlord instructions declining, rents are expected to rise sharply over the near-term, with all parts of the UK anticipated to see a further pick-up, RICS said.

Tarrant Parsons, senior economist at RICS, said: “Amid a backdrop of sharply rising living costs, slowing economic growth and higher interest rates, it is little surprise that housing market activity is now losing some momentum.

“With monetary policy set to be tightened further over the coming months, sales expectations point to a further softening in transaction volumes going forward.

“Nevertheless, with respect to house prices, limited supply available is still seen as a crucial factor underpinning the market. Although house price growth is likely to continue to ease, respondents still anticipate prices will be modestly higher than current levels in a year’s time.”

Tom Bill, head of UK residential research at estate agent Knight Frank, said: “Supply is so low because many people have taken a summer holiday for the first time in two years.

“Autumn will provide the acid test for the property market and we expect annual price growth to slow to single digits as supply picks up and demand cools.”