House prices continue to rise, despite signs of slowing demand, according to surveyors.
The Royal Institute of Notary Publications (RICS) found that 25% of real estate professionals reported that inquiries for new buyers fell in July – the third consecutive month of decline.
Sales expectations for the next 12 months are the bleakest since March 2020, when the COVID-19 lockdown began.
Higher interest rates and the cost of living crisis are cited as among the causes, although the survey was conducted before Bank of England raised interest rates by 50 basis points last week – the biggest single jump since 1995.
Even so, real estate prices are continuing to increase due to lack of goods.
About 63% of respondents said they saw prices increase in July – down from 78% in April but still well above the long-term average.
The general consensus is that home prices will remain higher in a year than they are now.
Tom Bill, head of UK residential research at estate agent Knight Frank, said: “Supply is so low because many people are on vacation for the first time in two years.”
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He added: “Fall will provide the acid test for the property market and we expect year-over-year price growth to slow to single digits as supply increases and demand cools.”
For offices to rent, 36% of real estate professionals say demand is up, and as indications for new homeowners fall, rents are expected to rise sharply.
Tarrant Parsons, senior economist at RICS, said: “Amid a sharp rise in the cost of living, slowing economic growth and higher interest rates, it is not surprising that housing market activity is picking up. lose motivation.
“With monetary policy set to tighten further in the coming months, sales expectations suggest a further decline in trading volumes going forward.
“However, for home prices, limited supply is still seen as an important factor underpinning the market. Although the rate of house price growth is likely to continue to decline, respondents are still predicting prices will be slightly higher than current levels in a year.”
