House prices and sales have declined, while new buyer enquiries have fallen to an eight-month low, the latest research from the Royal Institute of Chartered Surveyors (RICS) reveals.
The RICS UK Residential Survey shows that new enquiries slipped to a net balance of -45%, the lowest reading recorded since October 2022.
Respondents across all parts of the UK reported a negative trend in buyer enquiries compared to May.
For newly agreed sales, the net balance fell to -34%, from -8% in May.
The survey indicator representing trends in house prices nationally declined to a net balance of -46% from the -30% seen in May.
Overall, 58% of participants say homes with better energy efficiency credentials are holding their value in the current market, highlighting the importance of sustainability within the housing sector.
On the rental market, a net balance of +40% of respondents saw an increase in tenant demand.
However, June saw the biggest fall in landlord instruction numbers since May 2020, according to Rics.
RICS chief economist Simon Rubinsohn says the impact of the latest interest rates is ‘clearly visible’ in the findings, with buyer enquiries, sales and prices all falling over the past month.
He adds: “Inevitably in this environment, activity levels are likely to remain relatively subdued.
“However, an important message coming back from RICS agents is around ensuring prices are set with an eye on the market conditions of today, rather than the recent past; when this is done, sales are taking place.
“It is also worth bearing in mind that house prices are only very modestly down on their recent highs and well above where they stood prior to the onset of the pandemic.
“Further declines are possible but need to be seen in the context of the previous strength in the market.”
North London estate agent and former RICS residential chairman, Jeremy Leaf, says the latest rise in interest rates ‘hit the market like a missile’ and prompted a ‘pause for thought’ among buyers.
He adds: “However, we saw in our offices very few actual withdrawals from purchases, although we did notice some renegotiation of terms, usually including price, on nearly every sale.
“Listings are picking up but not as quickly as we expected, with interest on appropriately priced properties continuing to be dominated by cash or equity-rich buyers.”
MT Finance director Tomer Aboody says: “As buyers await a more stable macro market with either a possible halt to rate increases or even potentially a reduction, sellers are also waiting before putting their properties on the market.
“Afterall, why try to sell now when buyers for the most of it are not active? This, in turn, is leading to forced sellers selling at lower levels.
“Until some respite comes from the Bank of England, we will likely see the housing market stagnate.’”
