New home buyer inquiries dropped in April following three months of successive increases, as per a survey by RICS
The UK’s property market recovery has been hit by jump in mortgage rates as lenders keep raising costs for prospective homeowners.
New home buyer inquiries dropped in April following three months of successive increases, as per a survey by The Royal Institution of Chartered Surveyors.
A net balance of 1% of property professionals reported new buyer inquiries dropping rather than rising in April, following a balance of 6% reporting inquiries rising in March.
The regional feedback on buyer demand is mixed, with a notable loss of momentum mainly seen in London and southern parts of England, Rics said.
Buyers have also become cautious amid increasing mortgage rates, which has led a slump in house prices last month.
A balance of 5% of professionals reported prices dropping rather than increasing in April. This was unchanged from the previous month.
A balance of 1% of professionals expect house sales to drop rather than rise in the next three months, marking the weakest figures since October 2023.
Most major lenders have entered another cycle of hiking their mortgage rates over the last two weeks.
Simon Rubinsohn, chief economist at Rics, said: Feedback to the latest survey demonstrates the sensitivity of the sales market to interest rates at the present time, given the continuing challenge around affordability.
He said: A modest back up in mortgage pricing has contributed to the flatlining in the buyer inquiries metric over the last month, as well as the marginally more cautious signals around near-term expectations.
That said, there is still a strong perception that activity in the market will pick up in the latter part of the year and into 2025, irrespective of any political uncertainty around the general election, he added.
Virtually all parts of England returned either a flat or slightly negative data for house prices, while Northern Ireland and Scotland continued to see an upward trend in property values, according to the report.
