Housing market demand cools but prices still head upwards, say surveyors

The UK housing market is cooling, according to the latest Rics survey

PROPERTY professionals saw fewer new inquiries from house hunters in June, but house prices continued on an upward march, according to surveyors.

Some 27 per cent of professionals reported a fall in interest from potential buyers, the Royal Institution of Chartered Surveyors (Rics) said.

It marked the third month in a row that interest from new buyers slipped, with respondents citing a lack of available properties for buyers to choose from.

Survey participants also said market appraisals are broadly unchanged compared with 12 months ago, suggesting the tight supply backdrop is unlikely to shift drastically in the immediate future, it added.

The 65 per cent of professionals seeing prices increasing is lower than a recent high of 78 per cent in April but remains comfortably above the long-term average of 13 per cent, Rics said.

Looking further out, 37 per cent foresee prices continuing to climb over the next 12 months, although this is down compared with a high of 78 per cent recorded in February.

Some 13 per cent of professionals have seen newly agreed house sales fall back and transactions are expected to fall further in the next three months, Rics said.

House sales are also expected to fall in the 12 months ahead. Anecdotally, professionals are preparing for economic changes to have an impact, with many suggesting that the market is starting to cool off, the report added.

Many homes are still selling at above the original asking price, and on the competitiveness of the current market, half of survey participants reported that average sales prices are coming in above asking prices for properties listed at up to £500,000.

For properties priced between £500,000 and £1 million, 39 per cent are seeing the sales price beat the asking price. For properties listed at over £1 million, selling prices are typically coming in at slightly below the asking price on balance, the report said.

Rics chief economist Simon Rubinsohn said: "Although buyer inquiries 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 probably even more striking aspect of the latest report is the concern being voiced about the rental market."

Jonathan Hale, head of government affairs for the UK & Ireland at Rics, added: "The latest survey points to a further decline in housing availability and rents in the lettings sector show no signs of falling."