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New figures show that the UK’s housing market may be starting to cool as demand from buyers in May was lower than expected.
The Royal Institution of Chartered Surveyors (RICS) said that the number of new inquiries from house hunters had fallen to its slowest pace since February 2013, while figures from e.surv, the UK’s largest surveyor, showed that the number of house purchase mortgages fell to its lowest level in almost a year.
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Surveyors expect fewer sales in the next three months
A combination of high prices, lack of homes for sale and tougher mortgage lending rules has combined to result in a property market slowdown. Thats the conclusion of the RICS study which says that fewer home buyers are entering the market.
Inquiries from new buyers fell in May for the first time since January 2013 and more surveyors reported a fall in numbers than a rise for the first time in almost two years. RICS also said there were some early signs that concerns over both supply and finance could be influencing the outlook elsewhere in the country.
In the south-east, the proportion of surveyors expecting more sales over the next three months had fallen to 29 per cent from 66 per cent six months ago, while in the south-west it had dropped to 48 per cent from 93 per cent.
Surveyors who had been predicting that London would see price increases of 9 per cent a year over the next five years had revised that down to just under 5 per cent, while on a national level the forecast has edged down to 5 per cent.
The RICS report said: “Given the relationship between new buyer inquiries and new instructions on the one hand, and house price inflation on the other, this signals a slowdown in the latter over the next six to 12 months.”
The report also suggested that new mortgage lending rules have had an impact on cooling the housing market. Changes have come in which require lenders to undertake strict affordability checks before offering loans and RICS said anecdotal evidence suggested there had been a tightening in underwriting standards as a result.
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