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Buyer demand down for 12th month in a row

Christina Hoghton
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Christina Hoghton

High borrowing costs and an uncertain economic outlook are proving a challenge for home buyers

Buyer demand fell in April, according to the Royal Instituion of Chartered Surveyors, for the 12th consecutive month.

House prices and the number of agreed sales were also down.

The RICS added that the market is ‘continuing to struggle, with high borrowing costs and an uncertain economic outlook remaining the main challenges for home buyers’.

It found that the time taken from listing to completion has stretched to almost 20 weeks.

There were fewer properties coming to the market and fewer being appraised, so supply will stay sluggish. The average agent has 36 properties on their books – up very slightly but still near historic lows.

Simon Rubinsohn, RICS chief economist, said: “Buyer demand still appears to be subdued in the face of relatively high borrowing costs, the prospect of at least one more interest rate hike and ongoing affordability challenges.

“Meanwhile, the imbalance between demand and supply in the letting market still remains stark despite the significant increase in rents.

“Critical to addressing both areas of the market is the delivery of more supply. However, indicators of the level of new housing starts in the early part of the year suggests that the picture is if anything continuing to soften as housebuilders activity reflects both macro uncertainty and policy developments”.

Sarah Coles, head of personal finance at Hargreaves Lansdown, added: “The green shoots of optimism in the property market risk being crushed by cruel reality. Demand has now fallen every month for the past year, and with sales dwindling and house prices dropping, it’s proving more difficult to shift properties. It’s taking almost 20 weeks from first listing to final completion, as cautious buyers guard against hasty decisions.

“If you look closely enough, there are some positives, with agreed sales looking marginally less miserable than the previous month. And while agents expect things to be rough in the next few months, their expectations have been gradually picking up. The shortage of properties is no doubt putting a floor under prices, and is ensuring that properties that are well priced are eventually finding a buyer.

However, it’s a long way from spotting the small bright spots in the market to predicting a brighter future. While most of the indices still show house prices hanging onto gains over the past year, the monthly figures are less cheering. There’s still every chance prices could continue to fall from here.”