Demand from property buyers was flat in April due to rising mortgage rates, according to the latest UK Residential survey from the Royal Institution of Chartered Surveyors (RICS), although it is expected to pick up over the next 12 months.
New buyer enquires were down last month for the first time in four months. However, feedback surrounding buyer demand was mixed in April, the monthly sentiment survey found, with the slowest demand seen predominantly in London and Southern England.
Despite sluggish buyer demand, agreed sales improved, seeing the most positive reading since the start of 2021.
The supply of properties available on the market also increased,with nearly one in four (23%) of contributors noting a rise in the flow of new instructions during April, the most positive figure seen since September 2020.
Simon Rubinsohn, chief economist at 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 flat lining in the buyer enquiries 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.”
Turning to lettings, tenant demand also eased in April, with landlord instructions remaining in short supply. However, rents are expected to rise in coming months.
“As far as the lettings market is concerned, an increasing number of respondents are also drawing attention to affordability constraints, and this is reflected in a more modest pace of rental growth,”said Mr Rubinsohn. “But a fundamental problem in the market across much of the country remains the imbalance between demand and supply with new instructions continuing to decline”.
