Homebuyer demand down for seventh consecutive month

Christina Hoghton
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Christina Hoghton

All indicators are now showing a housing market slowdown, but how long will it last?

Buyer demand fell for the seventh month in a row in November, according to the Royal Insitution of Chartered Surveyors.

The RICS added that the number of agreed sales has also fallen, house prices are down and stock coming onto the market is down.

It said ‘this is the second month in a row that respondents across every UK region reported a decline in agreed sales, demonstrating what is a now a consistently negative picture at the national level’.

It added that overall, its surveyor members expect these trends to continue in the near-term.

Simon Rubinsohn, chief economist at the RICS, said: “The overall tone of the latest RICS Residential Survey is understandably more downbeat than previously, reflecting the uncertain macro environment and the higher cost of mortgage finance. However, anecdotal comments from respondents capture the very real significant divergences in market behaviour at a more localised level.

“Although the headline price balance recorded two consecutive modest monthly falls in prices, and the forward-looking series indicate that this trend will extend through the coming months, the likely ‘job-rich’ recession suggests the downturn in the housing market this time could be shallower compared with past experiences.

Sarah Coles, senior personal finance analyst at Hargreaves Lansdown, added: “Buyers are digging in for winter, and won’t be keen to move until the climate for property improves. Unfortunately, they may be in for quite a wait, and if they’re renting in the interim, there’s more bad news on the way.

“While most property data has an inbuilt three-month lag, which makes it relatively ancient history, these figures highlight what’s happening right now – focusing on who is planning to buy, and the sales being agreed today. It demonstrates that the chill wind that blew into the market at the end of the summer has become a howling gale into the winter, and we can’t expect a thaw for some time.

“There is still the hope that relatively high employment and low housing stock will prevent a deep and prolonged downturn. However, now confidence has taken a tumble, buyers aren’t going to be flooding back to the market in a hurry.”