The UK housing market has experienced a tenth consecutive month of decline, according to the Royal Institution of Chartered Surveyors (RICS). The number of buyers has fallen, as has the number of sellers, and agreed sales have decreased. However, the market decline is occurring more slowly than in previous months.
The average time to complete a sale has increased to almost 19 weeks, and agents expect house prices to fall further over the next 12 months. Furthermore, 60% of homes valued up to £500,000 are selling for less than the asking price, and this figure rises to 70% for homes worth between £500,000 and £1 million.
The RICS report highlights the impact of stretched mortgage affordability and subtle changes in the mortgage market, which may make it even more challenging for potential buyers. The report states that higher mortgage rates could lead to more forced buyers in the future, putting further pressure on the housing market.
The report also warns that renters are likely to face more rent rises in the future as more landlords leave the market. While the number of landlords leaving the market has slowed, tenant numbers continue to grow.
Sarah Coles, Head of Personal Finance at Hargreaves Lansdown, cautioned that while some agents are finding reasons for optimism, it may be premature. She added that higher mortgage rates could lead to more people flooding the market and pushing prices down, which could have a knock-on effect on wider inflation.
Overall, the RICS report suggests that the UK housing market is still in decline, and any optimism should be tempered by the fact that buyer and seller numbers are still falling, agreed sales are decreasing, and house prices are on the decline.
