Inquiries by buyers down as rates up

NEW home buyer inquiries fell back in April following three months of increases in a row, according to surveyors.

The Royal Institution of Chartered Surveyors (Rics) said its latest survey of property professionals suggests that a recent recovery in buyer demand has mellowed slightly, with the market seeming to have been impacted by mortgage rates edging up over the past few weeks.

A net balance of 1% of property professionals reported new buyer inquiries falling 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.

Looking at the number of properties available on the market, a net balance of 23% of professionals noted an increase in new instructions to sell during April, representing the most positive figure since September 2020, Rics said.

Average stock levels have picked up to a three-year high, at 43 properties per branch, the report said. Agreed sales have also improved, with a net balance of 5% of professionals seeing an increase rather than a fall in transactions.

Although this marks the most positive reading since May 2021, it only suggests a minimal increase in monthly sales, the report said.

A balance of 1% of professionals expect house sales to fall rather than rise in the next three months, marking the weakest reading since October 2023.

Over the coming year, a net balance of 33% of professionals expect house sales to rise rather than fall.

Looking at the lettings market, feedback suggests tenant demand is continuing to lose momentum, but landlord instructions remain in short supply, Rics said.

Simon Rubinsohn, chief economist, Rics, said: “Feedback to the latest Rics survey demonstrates the sensitivity of the sales market to interest rates at the present time, given the continuing challenge around affordability.

“A modest back up in mortgage pricing has contributed to the flatlining in the buyer inquiries metric over the past month, as well as the slightly 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.”