The latest RICS UK Housing Market survey has revealed that demand failed to pick up in June and supply of new property fell back.
RICS said that interest from potential buyers dropped off slightly last month, with a net balance of 10% more chartered surveyors reporting a fall in new buyer enquiries.
This, surveyors said, was mirrored by a lacklustre level of new homes coming onto the market as new instructions fell back for the second successive month.
Overall activity has struggled to see any considerable improvement since the expiry of the stamp duty holiday back in March.
Supply and demand have both failed to turn a corner in June with newly agreed sales slowing for three consecutive months. 12% more respondents across the UK reported falls rather than rises in newly agreed sales, while the average number of completed sales per surveyor over the previous three months fell fractionally to 15.5.
House prices across the UK continued to fall last month, with 22% more surveyors reporting price falls rather than rises, the weakest reading since October 2011. Regionally, London was once again the only part of the country to report rising prices, although the pace of increase has slowed significantly since the start of the year.
Expectations for future house prices showed little change as a net balance of 19% more surveyors expect prices to continue to fall. In spite of this, however, there is considerably more optimism surrounding transaction levels, with eleven percent more respondents predicting sales to increase rather than decrease over the coming three months.
“The housing market didn’t manage to turn a corner last month and activity remained in the doldrums,” said Simon Rubinsohn, RICS chief economist. “Fewer vendors looked to test the market and levels of buyer interest seem to have fallen back since the expiry of the stamp duty deadline earlier in the year.
“Although there is some positivity that the amount of sales going through is going to see an increase, it is unlikely that we will see any real movement until purchasing a property is more affordable and accessible for the likes of first time buyers.”
Nigel Lewis of PrimeLocation.com added: “While the RICS report paints a gloomy picture, the same cannot be said for the higher end of the market where prices are rising fast. Over the past 12 months £15,000 has been added to the average UK prime property and this trend looks set to continue.
“Rising asking prices are particularly pronounced in London, where the prime market continues to outperform the rest of UK significantly, continuing what appears to be an unstoppable price rally that has pushed up prices by £200,000 (16.5%) over the past year. The North West also has a number of hidden upmarket property gems, driving prime prices in the region up by 6.4% over the past year.
“So while the overall housing market is sluggish, the outlook for more affluent home owners, particularly in these high-growth regions, is very positive.”
