Real estate agents and surveyors report that the usual spring bounce in the property market has not materialized.
Rising mortgage rates appear to have put many buyers off, according to the latest survey by the Royal Institution of Chartered Surveyors (Rics).
The closely watched monthly survey takes the temperature of Rics members and offers a snapshot of what is happening in the property market across the country.
It said its members were seeing the recent recovery in buyer demand faltering slightly. This comes at a time when mortgage rates have been rising.
– READ: Experts say interest rates could stay high for longer than expected
Buyer Numbers Fall: The recent recovery in buyer demand has softened slightly, and the market has been hit by rising mortgage rates in recent weeks.
Wolverhampton-based Rics member Cheryl La said: “The mortgage market is wreaking havoc, creating instability for buyers and house-movers.”
Isle of Man-based Rics member Andrew Wallis added: “Buyers are still waiting for mortgage rate cuts and are therefore slow to commit now.”
However, the loss of buying momentum is mainly concentrated in London and the south of England, according to Rics, where house prices are typically higher.
Tim Green, a member of South Oxfordshire-based Rics, said: ‘We have seen a step back in market activity this month.
‘The spring bounce was short-lived and even if transactions continue, there has been no real recovery in activity as expected.
“The delayed reduction in interest rates and future economic uncertainty are still on buyers’ minds.”
David Robinson, a Rics member covering Cornwall West Devon and Torridge, said: “A much better level of guidance and consultation with better weather, but a real shortage of viable buyers.” A real cut in interest rates would help.
And Jonathan King, a member of Swindon-based Rics, added: “Inquiries from new buyers have slowed again after a promising first quarter.”
Meanwhile, although buyers appear to be postponing their plans, more homes are coming to market, according to Rics members.
Rics members reported a rise in instructions in April, it was the highest figure for new listings measured since the end of 2020, when the cheapest mortgage rates were trending matching around 1.5 per cent.
Average stock levels have now risen to a three-year high of 43 properties per branch.
Going forward, there are likely to be more homes on the market and the pipeline of new instructions appears strong, according to Rics members.
More homes for sale: The number of new seller announcements was the most positive since September 2020, according to Rics
Colin Townsend, a member of Malvern-based Rics, said: “There are a lot more properties coming to the market so buyers now have a lot more choice, but it’s taking longer to get deals done and a lot longer to push them through the process.” legal”. “The prices seem static.”
Birmingham-based Rics member Andrew Oulsnam said: ‘After a strong March for both instructions and sales, the first two weeks of April were very slow and only recovered in the last two weeks. May looks very promising in terms of instructions, but sales are still difficult to nail down.’
James Wilson, a member of Shaftesbury-based Rics, added: “New instructions are increasing but buyers remain cautious.”
House prices are still in balance, but they depend on where in the country a person is located.
Last week, Nationwide reported that the value of the average UK home fell for the second month in a row and remains 4 per cent below the peak recorded in summer 2022.
Prices will rise around this time next year: the general sentiment of Rics members points to a more positive outlook for the next twelve months
Virtually everywhere in England, the general consensus is that house prices are more likely to remain stable or fall slightly in the short term.
However, house prices in both Northern Ireland and Scotland are expected to continue their upward trajectory.
That said, agents and surveyors remain generally optimistic about the year ahead, with many more expecting house prices to be higher in 12 months than anticipating falls.
James Perris, a member of London-based Rics, said: ‘Mortgage applications have certainly increased, but buyers are struggling with affordability at most levels of the market, hence Nationwide’s recent report that prices they have gone down.
“We need the Bank of England to cut rates sooner than they suggest to avoid further falls.”
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