RICS have released their UK Residential Market Survey for July 2023.
- Organisation: This report comes from RICS (Royal Institution of Chartered Surveyors), a reputable source for the UK property market.
- Main Message: The housing market is seeing less action because of higher mortgage rates.
- Home Buyers: Interest from new home buyers has gone down by 45%. Basically, 45% fewer people are showing interest in buying homes compared to before. This is happening everywhere in the UK.
- Home Sales: Agreed home sales (where buyer and seller shake hands on a deal) also went down by 44% in July. This is the lowest it has been since the beginning of the pandemic.
- Future Sales Outlook: People’s hopes for future sales have also become negative. The outlook has gotten worse, dropping from -11% in May to -45% in July. However, over the next year, the outlook isn’t as bad, with a drop of only 25%.
- New Listings: The number of new homes being put up for sale has decreased by 13% in July. This is worse than June’s drop of 3%. Also, estate agents are doing fewer market evaluations than last year, showing a drop of 37%.
- Inventory: Estate agents have about 38 properties on their books. While this is more than the end of last year, it’s still low when we look back over many years.
- Rental Market: At the same time, more people want to rent. The demand for rented properties has jumped by 54%, which is the biggest increase since the start of 2022. But there’s a problem; fewer landlords are putting up properties for rent.
- Economist’s View: Simon Rubinsohn, the main economist at RICS, believes the recent increase in mortgages might drop soon. He points out two main worries:
- Homebuyers face challenges like uncertain economy, rising interest rates, and stricter lending rules.
- The rental market’s demand keeps going up, but supply isn’t keeping pace. So, rent prices will probably keep rising, even though people are already struggling with living costs.
- He said, “The recent uptick in mortgage activity looks likely to be reversed over the coming months if the feedback to the latest RICS Residential Survey is anything to go by. The continued weak reading for the new buyer enquiries metric is indicative of the challenges facing prospective purchasers against a backdrop of economic uncertainty, rising interest rates and a tougher credit environment.”
Buying a home is getting harder because of higher loan (mortgage) rates. Fewer people are looking to buy, and even fewer homes are being sold.