UK surveyors report a drop in demand as new buyers become more cautious as fears grow of further hikes in interest rates from the Bank of England.
The Royal Institution of Chartered Surveyors (RICS) reveals in its latest UK residential market survey that its measure of new buyer enquiries fell to a net balance of -37 in last month from -30 in March, the lowest since the beginning of the year.
The RICS house price balance, which measures the difference between the percentage of surveyors seeing rises and falls in prices, rose to -39 in April from -43 reported in March and -47 in February.
Earlier this week the latest Halifax House Price Index revealed that UK house prices dipped in April, but suggested the market was showing signs of more stability.
The Halifax index showed the average house price decreased by -0.3% in April (following +0.8% rise in March) and the annual rate of house price growth slowed to +0.1% (vs +1.6% in March).
According to Rics, buyer demand still appears to be subdued in the face of relatively high borrowing costs, the prospect of at least one more interest rate hike and ongoing affordability challenges linked to the cost of living crisis.
New instructions to sell were broadly flat, with the survey indicating a slight decline in fresh properties coming to market.
Although most sales market metrics have turned somewhat less negative over the past couple of months, the average sales time (from listing to completion) continues to lengthen.
Respondents report that sales are now taking close to 20 weeks to finalise at the national level, up from nearer to 17 weeks this time last year.
With demand continuing to outstrip supply, rental prices are anticipated to be driven higher over the near-term, with the latest net balance coming in at +56% (more or less aligned with a figure of +59% in the previous quarter).
Hargreaves Lansdown head of personal finance Sarah Coles believes the green shoots of optimism in the property market risk being crushed by cruel reality.
“Demand has now fallen every month for the past year, and with sales dwindling and house prices dropping, it’s proving more difficult to shift properties. It’s taking almost 20 weeks from first listing to final completion, as cautious buyers guard against hasty decisions.
“These figures are far more negative than those from Zoopla which noted a bounce around Easter as sales picked up. RICS hasn’t seen the same rises, and estate agents remain pretty miserable about the prospects for the immediate future too”.
Coles suggests if you look closely enough, there are some positives, with agreed sales looking marginally less miserable than the previous month.
“And while agents expect things to be rough in the next few months, their expectations have been gradually picking up. The shortage of properties is no doubt putting a floor under prices, and is ensuring that properties that are well priced are eventually finding a buyer,” she adds.
