Agreed sales, house prices and new instructions to sell homes remained on a downward trend in January, the Royal Institution of Chartered Surveyors (Rics) said.
A net balance of 47% of surveyors reported seeing a fall rather than an increase in new buyer inquiries, deteriorating from a balance of 40% who saw this the previous month.
January marked the ninth negative monthly reading in a row for new buyer inquiries.
Simon Rubinsohn, chief economist at Rics, said: “Although some respondents to the January Rics survey have noted a little more interest in the housing market as the new year got under way, the overall tone of the feedback still remains subdued, which is not altogether surprising given the jump in mortgage rates since the autumn.
“Prices, meanwhile, are now beginning to reflect the shift in balance between demand and supply.
Property professionals’ expectations suggest this picture is likely to remain in place for a while longer as the market adjusts to higher interest rates, Rics’ report added but there is uncertainty around how long this downtrend will persist.
“However, it is questionable how much downside to pricing there is likely to be given that recent macro forecasts from the Bank of England and others are now envisaging a less harsh economic environment this year,” Rubinsohn said.
Overall, those surveyed in all parts of the UK saw either a fall in demand or a stagnant trend over the latest survey period, Rics said.
A net balance of 14% of survey contributors also reported a decline in fresh properties coming on the market over January.
Looking at the year ahead, a net balance of 20% expect to see house sales fall rather than rise, marking an improvement compared with a balance of 42% expecting sales to fall in the next 12 months in December.
Sarah Coles, senior personal finance analyst at Hargreaves Lansdown, said: “January was deathly for the property market. Despite falling mortgage rates, buyers and sellers gave up the ghost, with buyer numbers continuing to fade for the 9th month in a row. Meanwhile, house prices declined for the fourth consecutive month – and the proportion of agents reporting house price falls rose again.
“Estate agents aren’t convinced the picture will change in a hurry. They expect the market to stay quiet and for prices to keep declining, as buyers get to grips with higher mortgage rates and the prospect of a falling market.”
Looking across to the lettings market, tenant demand continued to increase, according to a net balance of 43% of survey contributors. At the same time, landlord instructions continued to fall leaving more tenants to chase over fewer properties.
“There was more bad news for renters – as landlords continued to sell up and leave the market – for the 10th consecutive month. Some have decided to cash in while property prices are higher, others are getting out of the business because rising mortgage rates means they can no longer make the sums add up. They’re also being pushed out by punishing tax rules and tougher landlord legislation – both of which mean higher costs,” Coles added.
The residential market survey is a monthly sentiment survey by Rics of chartered surveyors operating in the UK’s residential sales and lettings markets.
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