The UK housing market continued to stutter in October, with subdued sales in most regions according to the latest Royal Institution of Chartered Surveyors (RICS) Residential Market Survey.
Surveyors said that demand from buyers has continued to decline, which has had an impact on both the number of sales agreed and property prices.
While prices nationally remain flat, according to RICS, this survey showed prices continued to decline in London and the South East. In total 63 per cent more respondents in the capital reported falling prices than rising prices over the past month. The last time the picture was this bleak was 2009.
Respondents also reported a weakening picture in the South East, East Anglia, and the North East. However, more surveyors reporting rising rather than falling prices in Scotland, the North West and Northern Ireland.
This RICS survey also showed prices were softening at the top end of the market, with 70 per cent of respondents saying sales prices were coming in below asking prices for home valued at £1m plus.
Data from RICS showed that 62 per cent of respondents said sale prices were below asking prices for homes valued between £500,000 and £1m.
Following a couple of months in which new instructions were broadly stable, this monthly survey indicates a renewed deterioration in the fresh flow of listings coming to market.
This housing market survey also found that it was taking longer to complete a sale, seen as further evidence that the housing market is slowing down.
For sales completed in October it took an average of 18.5 weeks to sell a house, up from 16.6 weeks in February, when this measure was first introduced.
Looking forward, national sales expectations remain flat over the coming three months, while the 12-month view has turned marginally negative, according to this survey. However, in 10 out of the 12 regions respondents expected house prices to rise over this period. The two areas with a more pessimistic outlook were London and the South East.
RICS chief economist Simon Rubinsohn says: “The combination of the increased cost of moving, a lack of fresh stock coming to market, uncertainty over the political climate and now an interest rate hike appear to be taking its toll on activity in the housing market.
“With both buyer inquiries slipping and sales expectations subdued, the sense is that home owners are staying put and first-time purchases are increasingly focusing on that part of the market supported by the Help to Buy initiative.”
He adds: “A stagnant second-hand market is bad news for the wider economy, not just in terms of spending but also because it restricts mobility.
“Prices do now seem under pressure at the more expensive end of the market with a further rise in the number of properties transacting at below the asking price. But it is important to not characterise the whole of the market by what is happening in parts of London and the wider South East.”
Mortgage Advice Bureau head of lending Brain Murphy adds: “This report is sentiment based, rather than reporting on hard data, which provides us with a good reference point in terms of how surveyors perceive the current market and their expectations both in the shorter and longer term.
“RICS suggests that the divergent picture we’ve seen over the last few months is still evident, with house price gains in the North West, Scotland and Northern Ireland, yet prices cooling in London and the South East. We can also see from the report that new sales instructions have fallen yet again, meaning a continued shortage of properties in many areas.”
He adds: “Overall market expectations remain flat for the next three months, which given the current status quo isn’t surprising. If consumers are seeking to sell then pricing realistically is going to be key, as clearly there are still buyers out there who are motivated and want to move, but the dynamic is shifting slightly in some areas.”