House prices continue to rise despite falling buyer interest, Rics real estate agents say, but they expect the sales rate to continue to decline.
- Interest from new buyers fell for the third month in a row, falling by nearly a third
- Experts say a general election would exacerbate the situation
- Demand for rental properties continued to far outpace listings driving rentals.
- London, Northern Ireland and Northern Ireland were the only areas where buyer demand increased
A lack of housing continues to drive house prices up despite falling demand, according to real estate agents at the Royal Institution of Chartered Surveyors.
Despite the fact that interest from new buyers fell for the third month in a row, almost a third (27 percent), house prices continued to rise in June.
Nearly two-thirds (65 percent) of survey respondents reported an increase in home prices. This was below the April high of 78 percent, but well above the long-term average of 13 percent.
Slowing property prices are driving house prices up despite falling buyer demand, according to Rics real estate agents
Tom Bill, head of UK residential research at Knight Frank, said: “Mortgage offers made on more favorable terms earlier this year will start to mature in the coming months, meaning buyers will have to reassess their plans.” .
‘Combined with economic news that it’s going to get worse before it gets better, and the fact that supply is picking up, the downward pressure on house prices will intensify after the summer.
“In the unlikely event of a general election this year, both activity and price growth would slow further.”
Despite economic setbacks, 65% of agents reported an increase in home prices in the past month
And the fall in interest is translating into a drop in sales. Some 13 percent of those surveyed said they had seen a drop in recently agreed sales, and looking ahead, 9 percent expected the number of transactions to continue to fall over the next three months.
RICS Chief Economist Simon Rubinsohn said: “Although buyer inquiries have unsurprisingly subsided a bit of late, this must be seen against the background of the healthy level of demand in recent months.”
And even with rising home prices, sales prices continue to exceed asking prices. Half of the survey participants said average sales prices were above sales prices for listed properties by up to £500k.
For properties priced between £500k and £1m, 39 per cent said they were seeing the asking price exceed the asking price. However, the most expensive houses priced at over £1 million were coming in slightly below asking price.
Only London, Northern Ireland and the North of England saw an increase in buyers. request last month.
Christopher Ames, a London-based estate agent for Rics, said: ‘There is still a dearth of overseas buyers willing or able to come to London to view properties.
‘Domestic demand is therefore more dominant but more aware of rising fuel prices and interest rates. The autumn market could well be more of a buyer’s market.’
Buyer’s Market: Traders say economic headwinds could tip the scales in favor of buyers
Rents keep going up
In the rental market, the continuous imbalance between supply and demand continues to push rents up.
Over the last month, 36 percent of those surveyed said they saw an increase in demand from tenants, but 11 percent saw a drop in the number of new instructions from landlords.
And half expected rents to rise in the coming months.
Commenting on the rental findings, Rubinsohn: ‘Probably an even more surprising aspect of the latest report is the concern expressed about the rental market.
“A combination of a lack of social housing development allied to more onerous changes in the private rental market is exacerbating the demand-supply imbalance, with the rental expectations metric pointing to stronger growth amid of the worsening cost of living crisis.
Upminster-based David Parish of estate agents Gates, Parish & Co’s added: “There is currently a dearth of new instructions.” The properties that are available are renting out quite quickly.
‘The government’s proposals for the private rental sector are poorly thought out and, if implemented, will reduce the availability of private rental properties.’
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