The pace of UK house price growth has “moderated noticeably”, while 12-month expectations have now turned negative, the latest UK Residential Survey from RICS has indicated.

RICS said that September’s results remain “indicative of the sales market losing momentum”, with the outlook for interest rates and the uncertain macro picture more broadly taking a toll on housing market activity.

The latest report from RICS has also suggested the impact from the expected rise in mortgage rates over the coming six months is anticipated to outweigh any potential boost from the government’s recently announced cut to stamp duty.

In terms of new buyer demand, an aggregate net balance of -36% of the RICS survey respondents cited a fall in enquiries during September, following a figure of -38% last month. As such, buyer enquiries have now fallen for five months running, with all regions of the UK now seeing a downward trend coming through.

As a result, stock levels are still at historic lows at the UK-wide level, with estate agents holding just 34 residential properties on their books, on average. Furthermore, given the fact that the net balance for market appraisals slipped to -20%, down from -3% in the previous iteration of the survey, RICS said suggests that the pipeline for supply has deteriorated over the past month.

Commenting on the findings, Hargreaves Lansdown senior personal finance analyst, Sarah Coles, said: “Buyers are getting cold feet, with worries that they might be getting in at the worst possible time – with prices near the top of the market, mortgage rates rocketing, and the cost of running a property rising horribly too.

“Even if they want to go ahead with a purchase, mortgage lenders may throw a spanner in the works, deciding the loan they need is now out of reach. As one agent suggested in the report, perhaps the party is over.

“Once potential buyers get the sense that the market is turning, the pressures will intensify, because they feel that by sitting tight, they can wait for mortgage rates to ease and prices to drop back. This will feed more price falls, and more people putting off a purchase, creating a vicious circle for the market. The risks are growing that we could see substantial price falls in the coming months.”

Share Story: