Housing Market Trouble Ahead - gloomy RICS predictions

The latest Royal Institution of Chartered Surveyors housing market snapshot shows the increasing damage being wrought by high interest rates.

The RICS snapshot is a sentiment survey of the institution’s renters are shows that new buyer enquiries show a figure of minus 45 per cent at national level - and every individual region is also firmly in negative territory.

And a net balance of minus 44 per cent of respondents noted a decline in agreed sales during July. This is a deterioration from a figure of minus 36 per cent previously and represents the weakest reading for the sales measure since the early stages of the pandemic.

Looking ahead, RICS warns that near-term sales expectations have turned increasingly subdued, posting clearly negative reading of minus 45 per cent in July. This is substantially weaker than the respective net balances of minus 38 and minus 11 per cent in June and May. 

Assessing trends in fresh listings coming onto the sales market, the headline new instructions net balance slipped to 13 per cent in July, compared to minus three per cent in June. 

This indicates a renewed deterioration in the flow of supply says RICS, and to pile on the agony it says its estate agent members continue to report the number of market appraisals undertaken over the month to be below that seen in the comparable period last year - a minus 37 per cent result on that metric.

RICS Chief Economist Simon Rubinsohn says: “The recent uptick in mortgage activity looks likely to be reversed over the coming months.

“The continued weak reading for the new buyer enquiries metric is indicative of the challenges facing prospective purchasers against a backdrop of economic uncertainty, rising interest rates and a tougher credit environment.”