In the RICS UK Residential Survey for May 2024, surveyors pointed to demand being hit by an ebb in confidence regarding an imminent cut in interest rates and the ongoing cost-of-living crisis.
Buyer demand was weakest in the South East and South West of England.
The number of sales agreed during May also fell, although a small rise is expected by surveyors over the coming three months and the 12-month outlook “remains upbeat”.
House prices also fell slightly in May.
Tarrant Parsons, RICS senior economist, said: “The recent recovery across the UK housing market appears to have slipped into reverse of late, with buyer demand losing momentum slightly on the back of the upward moves seen in mortgage rates over the past couple of months.
“Nevertheless, expectations point to this delaying, rather than derailing, a modest improvement going forward.”
Rental market supply and demand imbalance
Demand for rental property continues to rise alongside lack of supply, said RICS, creating a huge mismatch.
This leaves renters “tackling ever-rising living costs and plummeting affordability levels”.
Tenant demand rose notably in May, while new landlord instructions were flat. RICS said that the growing gap between supply and demand for lettings indicates that rental prices will continue to rise for the foreseeable future.
Justin Young, RICS chief executive, added: “While both the Conservatives and Labour have staked their claims as being the party of homeownership, for that to be the case, greater attention must be paid to improving conditions for Generation Rent, who are faced with rising rents and a lack of suitable options.
“This particular demographic – typically made up of people aged between 18 and 40 – has doubled in the last two decades, so politicians need to focus on them, as well as homeowners, as a means of gaining the support of a growing portion of the electorate.”
