Demand from buyers continued to increase in November, but the pace of growth appears to be “slowing and losing a bit of steam”, according to the latest residential survey by the Royal Institution of Chartered Surveyors.

The survey found a net balance of 27 per cent of respondents reported an increase in new buyer enquiries during November. 

While still comfortably in positive territory, this is down from 42 per cent in October and from 75 per cent in July, marking four consecutive months of falls.

But house price growth held steady in November, with a net balance of 66 per cent of surveyors reporting an increase in property values compared to 67 per cent last month. 

Price expectations for the year ahead strengthened as a net balance of 20 per cent of respondents predict prices will increase over the next 12 months, up from 8 per cent in October.

New listings continued to rise for the sixth month in a row, with 16 per cent of contributors noting an increase in November.

The number of agreed sales also rose with 25 per cent of participants recording an increase, although this was lower than the net balance of 41 per cent who reported growth in sales in October.

Sales rose in most regions, with Wales and Northern Ireland recording particularly strong growth.

However, surveyors in the West Midlands, East Midlands and Scotland reported flatter trend in agreed sales.

Expectations for the year ahead remain negative with a net balance of 21 per cent of respondents predicting weaker sales. 

Rising unemployment and the end of the stamp duty holiday in March were given as reasons for the subdued outlook.

In the lettings market, tenant demand was stable, but landlord instructions fell according to a net balance of 19 per cent of respondents.

Predictions for rental growth remained positive across most of the UK, but in London a net balance of 60 per cent of respondents anticipate rents will fall over the next three months.

RICS chief economist Simon Rubinsohn says: “It is clear from responses to the latest survey that there is considerable concern about the prospect of a sharp slowdown in transaction activity following the end of the first quarter of the coming year. 

“A scaling back in direct government support for the market is part of the reason for this but it is being compounded by expectations of material rise in unemployment as redundancy programmes begin to take effect. “Meanwhile, there is little sense that the projected softer sales picture will feed through into pricing which is viewed as likely to prove rather stickier in the face of ongoing macro challenges.

“A key issue as government looks to continue to build the delivery pipeline will be the response of developers to a tougher market without the incentive of the stamp duty break and the tapering of the Help to Buy scheme. 

“Critically, it is not simply a numbers game with the latest price moves highlighting ever more acute affordability issues and the importance of ensuring adequate provision across tenures.”

North London estate agent and former RICS residential chairman Jeremy Leaf says: “It seems that housing market activity has hit the buffers in the past few weeks, borne out by the findings in the RICS survey. 

“However, we see this more as a temporary seasonal lull rather than the start of any more serious correction. 

“Nearly all previously-agreed sales are proceeding to the usual hurried exchange of contracts before Christmas if possible. 

“Others are planned for soon after so that buyers can take advantage of the stamp duty holiday. We are not finding that prices are being renegotiated downwards either.

“Looking forward, there are potential hazards ahead in terms of worsening economic news and particularly rising unemployment. 

“Yet the prospect of a Covid vaccine and further release of pent-up demand is helping keep new enquiries, although lower than recent months, on a reasonably level path.”

MT Finance director Tomer Aboody adds: “It is interesting to see landlord instructions falling, which could be the result of several factors, including investors looking to sell up before the potential hike in capital gains tax which looks likely to come next spring. 

“The fall may also be down to would-be tenants or current tenants looking to buy themselves, taking advantage of low mortgage rates and the return of high loan-to-value deals. 

“Finally, it could be that many are staying put, rather than looking to move in an uncertain market.”