Rics: Buyer enquiries fall while prices rise

A net balance of -27% of survey participants reported a fall in interest, with the volume of sales also falling – this time for the second month in a row, with a net balance of -13% declining.

The report said nine percent of respondents expected a drop in transactions in the coming three months. For the next 12 months, a net balance of -21% was expected – a slight rise from the -24% figure reported in May.

Despite softer demand, prices continue to rise. In June, a net balance of +65% said prices had risen (versus a net balance of +78% in April). A net balance of +37% expected prices to continue rising throughout the next 12 months.

Rics chief economist Simon Rubinsohn commented: “Although buyer enquiries have predictably slipped a little of late, this needs to be placed in the context of the healthy level of demand in previous months.

“A combination of a lack of social housing development allied to more onerous changes in the private lettings market is exacerbating the imbalance between demand and supply leaving the rent expectations metric pointing to further strong growth in the midst of the worsening cost of living crisis.”

Meanwhile, estate agent and former Rics residential chairman Jeremy Leaf said: “Clearly the property market is not immune from a 40-year-high in inflation and five successive increases in interest rates, which Rics confirms is reducing demand.

“However, we are still seeing considerable interest from buyers, particularly in smaller, correctly-priced family houses.

“Increasingly-stretched buyers are beginning to test the resolve of previously-intransigent sellers, which is resulting in some price softening but no major corrections so far.”