Britain’s property market showed signs of slowing to a crawl after a jump in mortgage costs reduced both buyer demand and the volume of sales.
The Royal Institution of Chartered Surveyors said its measure of sales agreed fell to minus 44% in July, the weakest since the start of the pandemic and down from minus 36% in June. The survey of estate agents and property appraisers showed price declines were the widest-spread since 2009, just after the financial crisis.
The figures add to evidence that the housing market is weakening after the quickest series of increases in interest rates lifted the cost of mortgages. Lenders including Nationwide and Halifax say property prices are falling, and Bloomberg Intelligence estimates a peak-to-trough slump of 10% to 12% is “very likely.”
“The recent uptick in mortgage activity looks likely to be reversed over the coming months,” Simon Rubinsohn, chief economist at RICS, said Thursday in a report. He noted growing “economic uncertainty, rising interest rates and a tougher credit environment” were weighing on the market.
New buyer inquiries were falling sharply, registering minus 45% in the latest survey, about the same rate as the minus 46% in June. All parts of the UK were firmly in negative territory, RICS said.
In the rental market, tenant demand rose at the strongest pace since the start of 2022 while landlords put fewer properties on the lettings market. That left a net balance of 63% of those surveyed expecting rental values to rise in the coming months, a record for the report and above June’s result of 55%.
--With assistance from Andrew Atkinson.
