Estate agents report falling UK house prices, ending more than two years of growth

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Home prices are starting to drop! UK estate agents report decline, ending more than two consecutive years of growth, RICS says

  • UK estate agents have seen house prices fall for the first time in 28 months
  • RICS survey suggests price growth is coming to a halt
  • Rents are expected to increase by 4% over the next year due to the mismatch between supply and demand
  • The number of buyer inquiries fell again in October, down from September

According to the latest RICS survey, estate agents reported falling house prices across the country in October, ending a 28-month run of rising house prices.

In September the survey, which takes into account the views of RICS member estate agents across the UK, found a positive net rating of 30% when agents were asked about house prices, while in October this fell sharply to minus 2%.

RICS calculates net ratings by taking the number of agents who report falling prices from those who report rising. For example, if 30% reported an increase and 5% a decrease, the net balance would be 25%.

Autumn: RICS estate agents say they saw property prices fall in October

However, the overall figure masks regional price differences. Respondents to the survey in areas such as East Anglia and South East England were more likely to note price declines, posting net sales of -31% and -16% respectively.

Conversely, respondents based in Northern Ireland and Scotland continued to report an upward trend in house prices, although the pace of growth was slower than at the start of the year. year.

Looking ahead, respondents across all regions of the UK now broadly believe that prices will fall to some degree over the next year.

The October note suggests that “house price growth is coming to a halt,” according to the survey’s comments.

Meanwhile, the number of buyer inquiries fell for the sixth consecutive month, falling to minus 55%, dropping even further from minus 36% in September.

In addition, for the second month in a row, the number of requests fell in all regions of the United Kingdom.

House prices fell in October across the country according to RICS estate agents

Buyer inquiries are down across the UK, according to RICS, the second month they have fallen

Buyer inquiries are down across the UK, according to RICS, the second month they have fallen

Simon Rubinsohn, Chief Economist at RICS, commented: “The latest reactions to the RICS survey provide further evidence of buyer caution in the face of sharply rising mortgage costs.

“As a result, the volume of business is likely to decline over the next few months and realistic pricing is now much more important to closing a sale.”

“The stabilization of financial markets could provide some relief, although it may be premature to assume that this will soon translate into lower lending rates. However, the employment situation remains key to the outlook ahead. medium term and, for the time being, it remains solid.’

Estate agency Savills predicted prices would fall 10% next year before rising 1% in 2024. As recently as May, the estate agent predicted just a 1% drop in 2023, but the sharp rise in mortgage rates has led to a bleaker outlook.

Simon Wall of Stephanie Macnab Estate Agents said: “Steam has definitely left the market here, although activity remains at what would otherwise be considered a reasonable level.

“There is greater buyer force with tougher initial negotiations and renegotiations after the survey. Hopefully the easing economic outlook will improve things.

“At the same time, the number of new market listings also continues to decline with a net balance of -17% with respondents nationally citing a decline.”

Marion Currie of the Galbraith Group in Dumfries and Galloway, Scotland, said while there is still strong interest in available properties, interest is waning for the winter.

“The pool of buyers who have missed out on other properties over the past two years is still there but shrinking,” she added.

In the rental market, rents are expected to continue to climb as demand from tenants continues to increase at a healthy pace, with a net balance of 46% of survey participants noting an increase in October.

However, at the same time, owner instructions fell again according to a net balance of -14% of respondents.

In one year, respondents expect rents to have increased by around 4% nationally

What to do if you need a mortgage

Borrowers who need to find a mortgage because their current fixed rate contract is coming to an end, or because they have agreed to buy a home, have been urged to act, but not panic.

Banks and building societies are still lending and mortgages are still being offered and applications are being accepted.

However, rates change rapidly and there is no guarantee that transactions will last and not be replaced by mortgages at higher rates.

This is Money’s best mortgage rate calculator, powered by L&C, that can show you deals that match your mortgage and property value.

What if I need to remortgage?

Borrowers should compare rates and speak to a mortgage broker and be prepared to act to get a rate.

Anyone with a fixed-rate deal ending in the next six to nine months should consider how much it would cost them to remortgage now — and consider entering into a new deal.

Most mortgage transactions allow fees to be added to the loan and they are then only charged at the time of subscription. By doing so, borrowers can secure a rate without paying costly arrangement fees.

What if I buy a house?

Those who have agreed to buy a home should also aim to get quotes as soon as possible, so they know exactly what their monthly payments will be.

Homebuyers should be wary of overstretching and prepare for the possibility of home prices falling from their current high levels, due to higher mortgage rates limiting people’s ability to borrow.

How to Compare Mortgage Costs

The best way to compare mortgage costs and find the right deal for you is to talk to a good broker.

You can use our best mortgage rate calculator to view offers that match your home’s value, mortgage size, term, and fixed rate needs.

Be aware that rates can change quickly, however, and so the advice is that if you need a mortgage, compare rates and then speak to a broker as soon as possible, so they can help you find the loan mortgage that’s right for you.

> Check out the best fixed rate mortgages you could apply for

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