Buyer demand fell for the seventh month in a row in November, albeit not as fast as in October, according to The Royal Institution of Chartered Surveyors (RICS) latest house price index.
The number of agreed sales has also fallen – again not as fast as October, but it’s still negative in every region of the UK.
Price drops were especially common in the South East and South West, but prices have continued to rise in Scotland and Northern Ireland.
Simon Rubinsohn, RICS chief economist, said: “The overall tone of the latest RICS Residential Survey is understandably more downbeat than previously, reflecting the uncertain macro environment and the higher cost of mortgage finance.”
RICS anticipates that prices will keep falling in the coming 12 months. But Rubinsohn said it was possible that the fall in house prices might be fairly modest.
“Although the headline price balance recorded two consecutive modest monthly falls in prices, and the forward-looking series indicate that this trend will extend through the coming months, the likely ‘job-rich’ recession suggests the downturn in the housing market this time could be shallower compared with past experiences,” said Rubinsohn.
But for tenants there looks to be more misery as rents keep rising. With tenant numbers up and landlords down again, there’s no end in sight for spiralling rent costs.
Sarah Coles, senior personal finance analyst, Hargreaves Lansdown, said: “Buyers are digging in for winter, and won’t be keen to move until the climate for property improves. Unfortunately, they may be in for quite a wait, and if they’re renting in the interim, there’s more bad news on the way.
“While most property data has an inbuilt 3-month lag, which makes it relatively ancient history, these figures highlight what’s happening right now – focusing on who is planning to buy, and the sales being agreed today. It demonstrates that the chill wind that blew into the market at the end of the summer has become a howling gale into the winter, and we can’t expect a thaw for some time.
“It appears that gradually rising interest rates, and horrendous price hikes, were taking a toll in August. We know the declining trends ramped up dramatically in September and October, as confidence plummeted, and now it appears they have settled in for the longer term as the threat of recession sees something closer to permafrost sweep in.
“There is still the hope that relatively high employment and low housing stock will prevent a deep and prolonged downturn. However, now confidence has taken a tumble, buyers aren’t going to be flooding back to the market in a hurry.
“For those who decide to sell and rent – or just keep renting – while they wait for more positive moves from the market – there’s more bad news. The continued flow of new tenants into the market and landlords out of it keeps pushing up rents, and there’s no end in sight for this particularly horrible trend either.”
