UK Mortgage Rates Rise, Dampening Housing Demand: RICS Residential Survey

The housing market in the UK is experiencing a slight slowdown as mortgage rates have inched up in recent weeks, according to the latest RICS UK Residential Survey. While new listings hit a three-year high, demand for housing has softened, particularly in London and southern England.

The survey of chartered surveyors revealed a decrease in new buyer enquiries, with the net balance dropping to -1% in April from +6% in March. Sales expectations for the next three months also fell to -1%, the lowest reading since October, indicating a stagnating market in the near future.

The recent shift in financial markets, with reduced expectations of monetary policy loosening, has contributed to the decrease in sales expectations, according to RICS. However, long-term projections remain positive, with a net balance of +33% of respondents forecasting an increase in sales over the next 12 months.

House prices have remained relatively stable, with the indicator unchanged at a net balance of -5%. While Northern Ireland and Scotland have seen upward trends, other regions have reported flat or negative readings.

On the supply side, there has been a significant increase in the flow of new instructions, with a net +23% of surveyors noting a rise in April. Average stock levels have also reached a three-year high of 43 properties per branch.

Looking ahead, the survey suggests a solid pipeline for new instructions, with a net balance of +20% of respondents reporting an increase in market appraisals compared to the previous year. Despite the current softening of demand, the housing market in the UK shows signs of resilience and potential for growth in the long term.