A new UK housing market survey shows a negative growth is house buying for the first time since October 2005, according to the Royal Institution of Chartered Surveyors (RICS).
The report reveals that 1.8 per cent more chartered surveyors reported a fall in house prices rather than a rise compared with the 10.8 per cent reporting an increase in July.
Although there was weaker demand across the UK as a result of rising interest rates, the most affected areas were the West Midlands, the North West and East Anglia. London has been the least affected area so far, maintaining the strongest price increase in England.
Furthermore, new buyer enquiries fell for the ninth consecutive month and at the fastest pace since August 2004. Most regions were affected by the dwindling demand. The report shows that 37 per cent more chartered surveyors saw a fall rather than an increase in new buyer enquiries compared with 27 percent in July.
Company spokesperson Ian Perry said: “Potential house buyers have become far more cautious as they wait and see what affect interest rate rises will have on household finances. Affordability is at its most stretched in over a decade and many will worry that rising mortgage repayments will prove a step to far.”
New instructions to sell property fell for the third month in succession and confidence in household finances still appears strong. Indeed, the number of four-bedroom houses on the market has declined by 51 per cent, year-on-year. Despite this, the ratio of completed sales compared with the stock of unsold property increased.
Mr Perry predicts that “the market will soften further, going into the autumn, reducing some impetus from those that have been chasing a rapidly moving target.”
“HIPS have reduced the number of four bedroom family properties coming onto the market, making family homes even more difficult to purchase,” he added.
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