Estate agents report a fall in house prices across the UK ending more than two years of growth

House prices begin to fall! Estate agents report a decline across the UK ending more than two years of consecutive growth, tells RICS

  • Estate agents across the UK saw house prices fall for the first time in 28 months
  • RICS survey suggests price growth is ‘stopping’
  • Rents are expected to grow 4% over the next year due to the mismatch between supply and demand
  • The number of inquiries from buyers fell again in October, below September.

Estate agents reported a fall in house prices across the country in October, according to the latest RICS survey, ending a 28-month streak in which house prices were rising.

In September, the survey, which takes into account the views of RICS member estate agents across the UK, revealed a 30 per cent net positive rating when agents were asked about house prices, while in October it felt markedly less than 2 percent.

RICS calculates net ratings by taking the number of agents reporting a drop in prices from those reporting an increase. For example, if 30 percent reported an increase and 5 percent reported a drop, the net balance would be 25 percent.

Autumn: RICS estate agents reported seeing house prices fall in the month of October

However, the overall figure masks regional price differences. Respondents in areas such as East Anglia and the South East of England were most likely to notice price declines, posting net balances of -31 per cent and -16 per cent respectively.

By contrast, respondents in Northern Ireland and Scotland continued to report an upward trend in house prices, even if the pace of growth was slower than at the start of the year.

Looking ahead, respondents across the UK now generally feel that prices will come down to some degree over the next year.

The October rating suggests that “house price growth is stalling,” the comment in the survey said.

At the same time, the number of buyer inquiries fell for the sixth consecutive month to negative 55%, falling even more than September’s negative 36%.

In addition, for the second month in a row, the number of inquiries fell in all regions of the UK.

House prices have fallen in October across the country according to RICS estate agents

Inquiries from buyers have fallen across the UK, according to RICS, the second month they have fallen.

Inquiries from buyers have fallen across the UK, according to RICS, the second month they have fallen.

Simon Rubinsohn, RICS Chief Economist, commented: ‘The latest RICS survey comments provide further evidence of buyer wariness in the face of sharply rising mortgage costs.

“As a result, the volume of activity is likely to decrease in the coming months and it is now much more important to set realistic prices to complete a sale.

‘The stabilization of financial markets could provide some relief, although it may be premature to assume that this will be reflected in a reduction in interest rates in the short term. However, the employment outlook remains critical to the medium-term outlook and remains strong for the time being.’

Estate agency Savills has forecast prices to fall 10% next year before rising 1% in 2024. In May, the estate agency forecast a fall of just 1% in 2023, but the sharp rise in mortgage rates It has led to a bleaker picture.

Simon Wall of Stephanie Macnab Estate Agents, said: ‘Steam has definitely left the market here, although activity remains at what would otherwise be considered a reasonable level.

‘There is increased buyer strength with tougher initial negotiations and renegotiations after the survey. Let’s hope the calm in the economic outlook improves things.

“At the same time, the number of new listings entering the market also continues to decline with a net balance of -17 percent of respondents nationally citing a drop.”

Marion Currie of Galbraith Group in Dumfries and Galloway, Scotland, said that while there is still strong interest in available properties, interest is waning for the winter.

“The pool of buyers who have missed out on other properties in the last two years is still there, but it’s shrinking,” he added.

In the rental market, rents are expected to continue to rise as demand for tenants continues to rise at a robust rate, with a net balance of 46 percent of survey participants noting an increase in October.

However, at the same time, instructions from owners fell again according to a net balance of -14 percent of those surveyed.

In a year, respondents expect rents to have risen about 4 percent nationally

What to do if you need a mortgage

Borrowers who need to find a mortgage because their current fixed-rate agreement is coming to an end, or because they have agreed to purchase a home, have been urged to act but not panic..

Banks and building societies continue to lend and mortgages are still being offered and applications accepted.

However, rates are changing rapidly and there is no guarantee that the deals will last and not be replaced by mortgages that charge higher rates.

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What if I need to re-mortgage?

Borrowers should shop around and talk to a mortgage broker and be prepared to act to secure a rate.

Anyone with a fixed-rate agreement ending within the next six to nine months should consider how much it would cost to remortgage now and consider closing a new agreement.

Most mortgage deals allow fees to be added to the loan and are then only charged when you withdraw. By doing this, borrowers can lock in a rate without paying expensive setup fees.

What if I am buying a house?

Those with agreed home purchases should also aim to lock in rates as soon as possible, so they know exactly what their monthly payments will be.

Homebuyers should be careful not to overstretch themselves and be prepared for the possibility of house prices falling from their current high levels, due to higher mortgage rates limiting people’s borrowing capacity.

How to Compare Mortgage Costs

The best way to compare mortgage costs and find the deal that’s right for you is to talk to a good broker.

You can use our best mortgage rate calculator to display offers that match your home value, mortgage size, term, and fixed rate needs.

Keep in mind, however, that rates can change quickly, so the advice is if you need a mortgage, compare rates and then speak to a broker as soon as possible, so they can help you find the right mortgage for you. .

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