Estate agents and surveyors are reporting that the usual spring bounce across the property market has failed to materialise.
Rising mortgage rates appear to have stopped many buyers in their tracks, according to the latest survey by the Royal Institution of Chartered Surveyors (Rics).
The closely-watched monthly survey takes the temperature of Rics members and gives a snapshot of what is happening on the ground in the property market across the country.
It said its members were seeing the recent recovery in buyer demand stuttering slightly. This comes at a time when mortgage rates have been rising.
– READ: Experts say interest rates could stay high for longer than expected
Buyer numbers dip: The recent recovery in buyer demand has mellowed slightly, with the market impacted by the increase in mortgage rates over the last few weeks
Cheryl La, a Rics member based in Wolverhampton said: ‘The mortgage market is causing havoc, creating instability for the buyers and home movers.’
Andrew Wallis, a Rics member based on the Isle Of Man added: ‘Buyers are still waiting for mortgage rate cuts and hence slow to commit now.’
However, the loss of buyer impetus is mainly concentrated in London and Southern parts of England, according to Rics, where house prices are typically higher.
Tim Green, a Rics member based in South Oxfordshire said: ‘We have seen a step backwards in market activity this month.
‘The spring bounce was short lived and even if transactions continue, there has been no real catch-up in activity as hoped for.
‘Delayed reduction in interest rates and future economic uncertainty are still in buyers’ minds.’
David Robinson, a Rics member covering Cornwall West Devon and Torridge said: ‘Much better level of instructions and enquiries with better weather, but a real shortage of proceedable buyers. An actual interest rate cut would help.
And Jonathan King, a Rics member based in Swindon added: ‘New buyer enquiries have slowed again after a promising first quarter.’
Meanwhile, while buyers appear to be putting their plans on hold, more homes are coming to market, according to Rics members.
Rics members reported an increase in instructions in April, it was the highest figure for the new listings gauged since late 2020 when the cheapest mortgage rates were trending around 1.5 per cent coincidentally.
Average stock levels have now picked up to a three-year high, at 43 properties per branch.
Going forward, there are likely to be more homes hitting the market with the pipeline for new instructions appearing solid, according to Rics members.
More homes for sale: The number of new listings from sellers was at its most positive since September 2020, according to Rics
Colin Townsend, a Rics member based in Malvern said: ‘A lot more property is coming to the market so buyers now have much more choice but it’s taking longer to agree deals and much longer to push them through the legal process. Prices seem static.’
Andrew Oulsnam, a Rics member based in Birmingham Said: ‘After a strong March for both instructions and sales, the first two weeks of April were very slow picking up only in the last two weeks. May is looking very promising for instructions but sales are still difficult to arrange.’
James Wilson, a Rics member based in Shaftesbury added: ‘New instructions are increasing but buyers remain cautious.’
House prices remain in the balance, but depend on where in the country someone is based.
Last week Nationwide reported that the average UK home fell in value for the second month in a row and remain 4 per cent below the peak recorded in summer of 2022.
Prices to be up this time next year: General sentiment from Rics members points to a more positive picture over the next twelve months
In virtually all parts of England, the general consensus is that house prices are more likely to remain flat or fall slightly in the short term.
However, in both Northern Ireland and Scotland house prices are expected to continue on their upward trajectory.
That said, agents and surveyors remain generally optimistic about the year ahead with many more expecting house prices to be higher in 12 months than there are anticipating falls.
James Perris, a Rics member based in London said: ‘Mortgage applications are certainly up but buyers are struggling with affordability at most tiers of the market hence the recent Nationwide report that prices are down.
‘We need the Bank of England to reduce rates sooner than they are intimating to prevent further falls.’
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