New buyers thin out as market slowdown continues over summer

The market slowdown continues with the Royal Institution of Chartered Surveyors reporting that new buyer enquiries have reduced for the first time in four months.

New buyer enquiries shrank over July with a net balance of minus nine per cent of respondents seeing a fall, down from plus 10 per cent in June, and ending a positive four-month streak for the UK housing market.

As a result, the number agreed sales also took a dip, with a net balance of minus 21 per cent in July across the UK and sales volumes slowing most notably in Yorkshire & the Humber, the East Midlands and East Anglia.

House price growth was again influenced by the lack of properties ready for sale, with a net balance of minus 46 per cent of respondents reporting a fall in new listings, down further from the minus 35 per cent reported in June.

It is therefore unsurprising that plus 78 per cent of respondents reported house prices rising, although this is slightly down from the plus 82 per cent reported in the past two months.

At regional level, growth in house prices was seen across the UK, with the North of England, Wales and East Anglia seeing especially strong growth. On the flipside, London saw more moderate feedback, however the latest net balance of plus 45 per cent is still up when compared with previous results.

A net balance of plus 66 per cent of respondents nationally predict that prices will continue to rise over the next year, up on the June figure.

Simon Rubinsohn, RICS chief economist, says:

“Although the tapering in stamp duty is beginning to have some impact on RICS activity indicators, the overall tone to the market remains firm with the metrics capturing price expectations showing few signs of wavering.

“Significantly, a strong message from survey respondents is that buyers are continuing to place a premium on space with the prospect of a hybrid model of work being adopted by many organisations providing the opportunity for greater flexibility around location.

“This is being reflected both in the challenge some current homeowners are having in moving up the property ladder as well in stronger price expectations from the RICS survey for larger than smaller properties.”

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