LONDON – Britain’s property market showed signs of slowing to a crawl after a jump in mortgage costs rThe Royal Institution of Chartered Surveyors said its measure of sales agreed fell to minus 44 per cent in July, the weakest since the start of the pandemic and down from minus 36 per cent in June. The survey of estate agents and property appraisers showed price declines were the widest-spread since 2009, just after the financial crisis.
The figures add to evidence that the housing market is weakening after the quickest series of increases in interest rates lifted the cost of mortgages. Lenders including Nationwide and Halifax say property prices are falling, and Bloomberg Intelligence estimates a peak-to-trough slump of 10 per cent to 12 per cent is “very likely.”
“The recent uptick in mortgage activity looks likely to be reversed over the coming months,” Simon Rubinsohn, chief economist at RICS, said Thursday in a report. He noted growing “economic uncertainty, rising interest rates and a tougher credit environment” were weighing on the market. New buyer inquiries were falling sharply, registering minus 45 per cent in the latest survey, about the same rate as the minus 46 per cent in June. All parts of the UK were firmly in negative territory, RICS said.
In the rental market, tenant demand rose at the strongest pace since the start of 2022 while landlords put fewer properties on the lettings market. That left a net balance of 63 per cent of those surveyed expecting rental values to rise in the coming months, a record for the report and above June’s result of 55 per cent. BLOOMBERG
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