Home prices continue to rise despite declining interest from buyers, Rics real estate agents say — but they expect the rate of sales to continue to slow
- Interest on new buyers fell for the third month in a row, falling by almost a third
- Experts say holding a general election will exacerbate the situation
- The demand for rental properties has continued to far outpace listings, driving up rents
- London and Northern and Northern Ireland were the only areas seeing a rise in buyer demand
The housing shortage continues to drive house prices higher despite falling demand, according to RICS estate agents.
Although new buyer interest declined for the third month in a row, down nearly a third (27 percent), home prices continued to rise in June.
Nearly two-thirds of respondents (65 percent) reported an increase in home prices. This was down from April’s high of 78 percent but well above the long-term average of 13 percent.
A slowdown in real estate listings has pushed up home prices despite lower demand from buyers, according to Ricks real estate agents
Tom Bell, UK head of residential research at Knight Frank, said: “Mortgage offers made on more favorable terms earlier this year will start to expire in the coming months, which means buyers may have to reassess their plans.
Coupled with economic news that will get worse before it gets better, and the fact that supply is rebuilding, downward pressure on home prices will only increase after the summer.
“In the unlikely event of a general election this year, activity growth and prices will slow further.”
Despite economic headwinds, 65% of agents reported a rise in home prices in the past month
Decreased interest translates into a decrease in sales. About 13 percent of respondents said they had seen a decrease in newly agreed sales, and as they look to the future, 9 percent expected transaction numbers to continue to fall over the next three months.
RICS chief economist Simon Robinson said: “Although buyers’ inquiries have predictably eased slightly in recent times, this must be put in context with the healthy level of demand in previous months.”
Even as home prices rise, selling prices continue to exceed asking prices. Half of those surveyed said average sales prices were above asking prices for listed properties at £500,000.
For properties between £500,000 and £1m, 39 per cent said they would see the selling price as more than the asking price. However, the most expensive homes over £1m were slightly below the asking price.
Only London, Northern Ireland and northern England saw an increased buyer. request last month.
Christopher Amis, a London-based real estate agent for Rics, said: “There is still a shortage of foreign buyers willing or able to come to London to view properties.
Thus housing demand is more dominant but more conscious of rising fuel prices and interest rates. A fall market can be more than a buyer’s market.
Buyers Market: Agents say economic headwinds could tip the scales in favor of buyers
Rents continue to rise
In the rental market, the persistent imbalance between supply and demand has continued to drive up rents.
Over the past month, 36 percent of respondents said they had seen an increase in tenant demand, but 11 percent had seen a decrease in the number of new landlord instructions.
Half expected rents to rise in the coming months.
Robinson commented on the rental results: “Perhaps the most surprising aspect of the latest report is the concern expressed about the rental market.
“The combination of a lack of social housing development associated with more difficult changes in the private rental market is exacerbating the imbalance between demand and supply, causing a measure of rent expectations to point to more robust growth amid a worsening cost-of-living crisis.”
Parish & Co, based in Upminster David Parish of Gates Estate Agents, added: “There is a lack of new instructions at the moment. Properties available allow very quickly.
“The government’s proposals for the private rental sector are not well thought out and if implemented would reduce the availability of real estate rented to the private sector.”
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