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The House market is slowing.

 


House sales continued to slow last month while the rental market picked up pace as prospective buyers put off purchases amid the surge in mortgage rates. According to the latest survey from the Royal Institution of Chartered Surveyors, inquiries among new buyers fell for a sixth consecutive month in October and the average time taken to complete a sale rose as buyers became wary about a looming recession. The net balance for new buyer enquiries fell sharply to -55 per cent in October, down from -36 per cent the month before, suggesting that prospective buyers are increasingly cautious about purchases as financial conditions deteriorate. In addition, the average time taken to complete a sale from the date of the initial listing rose to 18 weeks, up from 16 weeks in October last year.

However, rental prices continued to rise, with a net balance of 42 per cent of survey respondents reporting an increase in the past month. The number of new landlords fell, with a net ratio of -14 per cent over the same period. Demand was outpacing supply in the rental market, pushing up forecasts for rental prices. Simon Rubinsohn, the institution’s chief economist, said it was «difficult to see this changing any time soon in the current environment». The price of rental properties is expected to rise as the stock of homes available to let fails to keep up with demand.

Chartered surveyors polled by the trade body expect rents to have risen by an average of 4 per cent across the country in a year. House buyers are facing a jump in the cost of borrowing after the Bank of England last week increased interest rates for the eighth time in a year, taking the base rate to its highest level since the global financial crisis at 3 per cent. Average prices fell by 0.4 per cent to a five-month low of £292,598 after dipping by 0.1 per cent in September, according to the index, the sharpest fall in prices since February last year. The annual growth rate dropped to 8.3 per cent from 9.8 per cent the previous month.

« The settling down in financial markets could provide some relief, although it may be premature to assume this will be reflected in a reduction in lending rates any time soon».



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  1. Ted10 November 2022 at 17:26

    It makes sense that people are much more cautious nowadays, considering everything that's happening in the world. Although it's not good, 18 weeks is ok to complete a sale. I hope we don't get to 25 or even 30 weeks next year.

    ReplyDelete

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