House prices and buyer interest fell in June, Rics say
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Buyer interest, sales and property prices suffered in June as mortgage rates continued to rise, according to the latest results of a closely-watch survey.
June saw new buyer enquiries reach an eight-month low, pointing to a 'renewed deterioration' in the UK sales market, the Royal Institution of Chartered Surveyors said.
Property prices continued to slow in June and many estate agents surveyed by Rics think further falls could be on the cards in the coming months.
Sluggish: Buyer interest, sales and property prices slipped back further in June
Estate agents and surveyors expect activity in the housing market to remain subdued as higher borrowing costs hit new buyer enquiries.
In the rental market, tenants are continuing to see rents rise, and June saw the biggest fall in landlord instruction numbers since May 2020, according to Rics.
RELATED ARTICLES Share this article Share HOW THIS IS MONEY CAN HELP Simon Rubinsohn, chief economist at Rics, said: 'The latest increase in interest rates and the impact this has already had on mortgage rates is clearly visible in the key Rics metrics regarding buyer enquiries, sales and prices which have all retreated over the past month.
'Inevitably in this environment, activity levels are likely to remain relatively subdued.
'However, an important message coming back from Rics agents is around ensuring prices are set with an eye on the market conditions of today, rather than the recent past; when this is done, sales are taking place.
'It is also worth bearing in mind that house prices are only very modestly down on their recent highs and well above where they stood prior to the onset of the pandemic.
'Further declines are possible but need to be seen in the context of the previous strength in the market. Additional questions included in the latest survey also provide some support for the notion that, on balance, properties with better energy efficiency credentials are holding their value better than some others.'
Neil Foster, a partner at Hadrian Property Partners, added: 'Sales market feels like an oxymoron this month. Deals are few and far between and there is clear caution, particularly amongst buy to let investors, with the prospect of a perfect storm to come if the cost of debt continues to rise as prices begin to fall.'
Buyer enquiries, prices and property sales downAn overall net balance of 45 per cent of property professionals reported buyer enquiries falling rather than rising, deteriorating from a balance of 20 per cent seeing this in May.
A net balance of 34 per cent of professionals also reported newly agreed sales falling rather than rising, which was also a weaker figure than the balance of 8 per cent observing this in May.
This was the most downbeat sales figure since December 2022, when a net balance of 38 per cent of professionals saw sales falling.
Less buyer interest: Buyer enquiries fell last month, new data from Rics shows
Falling: UK property prices continued to fall in June, Rics said
What's next? UK property price forecasts for the next year, according to Rics
A net balance of 46 per cent of estate agents reported house prices falling rather than rising, further deteriorating from a balance of 30 per cent in May.
Rics said some survey participants indicated that homes with better energy efficiency credentials are holding their value in the current market.
Figures from Moneyfactscompare.co.uk on Wednesday showed that, across all deposit sizes, the average two-year fixed residential mortgage was 6.70 per cent, while the average five-year fix on the market was 6.20 per cent.
Earlier this week, average two-year fixed mortgage rates surpassed levels seen following last autumn's mini budget.
Jeremy Leaf, north London estate agent and a former Rics residential chairman, said: ‘There's no doubt the latest rise in interest rates hit the market like a missile, prompting a pause for thought at the very lease among buyers.
‘However, we saw in our offices very few actual withdrawals from purchases, although we did notice some renegotiation of terms, usually including price, on nearly every sale.
‘Listings are picking up but not as quickly as we expected, with interest on appropriately-priced properties continuing to be dominated by cash or equity-rich buyers.'
Britain's housing market faces pressure from softer buyer demand and falling house prices against a backdrop of surging mortgage rates and the Bank of England's battle to tame stubborn inflation. Average two-year fixed mortgage rates hit a 15-year high earlier this week.
Last week, Halifax said house prices fell by 2.6 per cent year-on-year in June, the largest annual drop since 2011. Rival Nationwide reported a 3.5 per cent annual decline in property prices, the biggest since 2009.
Landlord instructions fall to lowest since May 2020For the rental market, a net balance of 40 per cent of estate agents saw an increase in tenant demand last month, sewa mobil jogja murah, Rics said.
At the same time, a net balance of 36 per cent saw landlord instructions falling rather than rising.
Instructions: Landlord instructions slowed again in June, Rics said
Costly: Rents are expected to keep on rising over the next few months, Rics said
With rising demand still being met with a lack of available properties to let, a net balance of 53 per cent of experts surveyed expect rental prices to increase over the coming months.
Summing up the state of play, Alex Mcneil, a partner at Bramleys, said: 'Rents keep increasing and availability keeps receding.'
Ben Twomey, chief Executive of Generation Rent, said: 'Soaring rents since the pandemic are now having a knock-on effect on the number of homes being advertised to rent.
'Many tenants might want to move but simply cannot because the rent on a new tenancy is now far higher than what they are currently paying.
'That means fewer properties are becoming available and those that do are being snapped up more quickly by tenants who do need to move. That is keeping rents high and unaffordable for many.'
He added: 'To bring rents back within reach of people on ordinary incomes, the government needs to build more homes in the places people want to live. That must also include many more social homes so that people on low incomes can live near their workplaces and families.'
June saw new buyer enquiries reach an eight-month low, pointing to a 'renewed deterioration' in the UK sales market, the Royal Institution of Chartered Surveyors said.
Property prices continued to slow in June and many estate agents surveyed by Rics think further falls could be on the cards in the coming months.
Sluggish: Buyer interest, sales and property prices slipped back further in June
Estate agents and surveyors expect activity in the housing market to remain subdued as higher borrowing costs hit new buyer enquiries.
In the rental market, tenants are continuing to see rents rise, and June saw the biggest fall in landlord instruction numbers since May 2020, according to Rics.
RELATED ARTICLES Share this article Share HOW THIS IS MONEY CAN HELP Simon Rubinsohn, chief economist at Rics, said: 'The latest increase in interest rates and the impact this has already had on mortgage rates is clearly visible in the key Rics metrics regarding buyer enquiries, sales and prices which have all retreated over the past month.
'Inevitably in this environment, activity levels are likely to remain relatively subdued.
'However, an important message coming back from Rics agents is around ensuring prices are set with an eye on the market conditions of today, rather than the recent past; when this is done, sales are taking place.
'It is also worth bearing in mind that house prices are only very modestly down on their recent highs and well above where they stood prior to the onset of the pandemic.
'Further declines are possible but need to be seen in the context of the previous strength in the market. Additional questions included in the latest survey also provide some support for the notion that, on balance, properties with better energy efficiency credentials are holding their value better than some others.'
Neil Foster, a partner at Hadrian Property Partners, added: 'Sales market feels like an oxymoron this month. Deals are few and far between and there is clear caution, particularly amongst buy to let investors, with the prospect of a perfect storm to come if the cost of debt continues to rise as prices begin to fall.'
Buyer enquiries, prices and property sales downAn overall net balance of 45 per cent of property professionals reported buyer enquiries falling rather than rising, deteriorating from a balance of 20 per cent seeing this in May.
A net balance of 34 per cent of professionals also reported newly agreed sales falling rather than rising, which was also a weaker figure than the balance of 8 per cent observing this in May.
This was the most downbeat sales figure since December 2022, when a net balance of 38 per cent of professionals saw sales falling.
Less buyer interest: Buyer enquiries fell last month, new data from Rics shows
Falling: UK property prices continued to fall in June, Rics said
What's next? UK property price forecasts for the next year, according to Rics
A net balance of 46 per cent of estate agents reported house prices falling rather than rising, further deteriorating from a balance of 30 per cent in May.
Rics said some survey participants indicated that homes with better energy efficiency credentials are holding their value in the current market.
Figures from Moneyfactscompare.co.uk on Wednesday showed that, across all deposit sizes, the average two-year fixed residential mortgage was 6.70 per cent, while the average five-year fix on the market was 6.20 per cent.
Earlier this week, average two-year fixed mortgage rates surpassed levels seen following last autumn's mini budget.
Jeremy Leaf, north London estate agent and a former Rics residential chairman, said: ‘There's no doubt the latest rise in interest rates hit the market like a missile, prompting a pause for thought at the very lease among buyers.
‘However, we saw in our offices very few actual withdrawals from purchases, although we did notice some renegotiation of terms, usually including price, on nearly every sale.
‘Listings are picking up but not as quickly as we expected, with interest on appropriately-priced properties continuing to be dominated by cash or equity-rich buyers.'
Britain's housing market faces pressure from softer buyer demand and falling house prices against a backdrop of surging mortgage rates and the Bank of England's battle to tame stubborn inflation. Average two-year fixed mortgage rates hit a 15-year high earlier this week.
Last week, Halifax said house prices fell by 2.6 per cent year-on-year in June, the largest annual drop since 2011. Rival Nationwide reported a 3.5 per cent annual decline in property prices, the biggest since 2009.
Landlord instructions fall to lowest since May 2020For the rental market, a net balance of 40 per cent of estate agents saw an increase in tenant demand last month, sewa mobil jogja murah, Rics said.
At the same time, a net balance of 36 per cent saw landlord instructions falling rather than rising.
Instructions: Landlord instructions slowed again in June, Rics said
Costly: Rents are expected to keep on rising over the next few months, Rics said
With rising demand still being met with a lack of available properties to let, a net balance of 53 per cent of experts surveyed expect rental prices to increase over the coming months.
Summing up the state of play, Alex Mcneil, a partner at Bramleys, said: 'Rents keep increasing and availability keeps receding.'
Ben Twomey, chief Executive of Generation Rent, said: 'Soaring rents since the pandemic are now having a knock-on effect on the number of homes being advertised to rent.
'Many tenants might want to move but simply cannot because the rent on a new tenancy is now far higher than what they are currently paying.
'That means fewer properties are becoming available and those that do are being snapped up more quickly by tenants who do need to move. That is keeping rents high and unaffordable for many.'
He added: 'To bring rents back within reach of people on ordinary incomes, the government needs to build more homes in the places people want to live. That must also include many more social homes so that people on low incomes can live near their workplaces and families.'
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