UK house-buying demand slumps - RICS
By Abigail Townsend
Date: Thursday 10 Nov 2022
(Sharecast News) - The UK housing market weakened further last month, a closely-watched survey showed on Thursday, as demand tumbled and house price growth came to a halt.
According to the latest RICS Residential Market Survey, new buyer enquiries fell for a sixth successive month in October, to -55 from -36 in September. It was the lowest reading since the 2008 financial crisis after spring 2020, when the housing market was halted during the first Covid-19 lockdown.
House prices also came under pressure, with the national net balance sliding to -2 from 30 a month previously, ending a 28-month run of positive readings.
Simon Rubinsohn, chief economist at the Royal Institution of Chartered Surveyors, said: "The latest feedback to the RICS survey provides further evidence of buyer caution in the face of the sharp rise in mortgage costs.
"As a result, the volume of activity is likely to slip back over the coming months, and realistic pricing is now much more important to complete a sale. The settling down in financial market could provide some relief, although it may be premature to assume this will be reflected in a reduction in lending rates anytime soon."
Mortgage rates spiked after the government's disastrous mini budget on 23 September. Since then, new chancellor Jeremy Hunt has scrapped most of the announced measures and markets have calmed. But they are still pricing in further rises in the interest rate, which has risen from 0.1% to 3% so far this year.
Looking ahead, the net balance for 12-month price expectations fell to -42, from -18 in September.
In contrast to the faltering housing market, however, the lettings market continued to see tenant demand rise at a "solid pace" in October, RICS noted.
The RICS survey was based on 317 responses from chartered surveyors.
Email this article to a friend
or share it with one of these popular networks:
You are here: news
10 Lower Thames St,
London EC3R 6EN