Cooling off in demand but prices rising

PROPERTY professionals saw fewer new inquiries from house hunters in June, but house prices continued on an upward march, according to surveyors.

Some 27% of professionals reported a fall in interest from potential buyers, the Royal Institution of Chartered Surveyors (Rics) said.

It marked the third month in a row that interest from new buyers slipped.

London appeared to be more resilient, as 7% of professionals there reported an uptick in inquiries in the past month.

Despite a general cooling in demand in the housing market, the direction of house prices was upwards, with 65% of professionals seeing an increase.

That’s because of a lack of available properties for buyers to choose from, the report said.

Survey participants also said market appraisals are broadly unchanged compared with 12 months ago, suggesting the tight supply backdrop is unlikely to shift drastically in the immediate future, it added.

The 65% of professionals seeing prices increasing is lower than a recent high of 78% in April but remains comfortably above the long-term average of 13%, Rics said.

Looking further out, 37% foresee prices continuing to climb over the next 12 months, although this is down compared with a high of 78% recorded in February.

Some 13% of professionals have seen newly agreed house sales fall back and transactions are expected to fall further in the next three months, Rics said.

House sales are also expected to fall in the 12 months ahead. Anecdotally, professionals are preparing for economic changes to have an impact, with many suggesting that the market is starting to cool off, the report added.

Many homes are still selling at above the original asking price.

Looking at the competitiveness of the current market, half of survey participants reported that average sales prices are coming in above asking prices for properties listed at up to £500,000.

For properties priced between £500,000 and £1 million, 39% are seeing the sales price beat the asking price.

For properties listed at over £1 million, selling prices are typically coming in at slightly below the asking price on balance, the report said.

Rents are also expected to rise due to the continued imbalance between supply and demand, Rics said.