Housing market goes in reverse over August

A fall in both house sales and mortgage approvals in August has backed growing evidence that the booming property market is at last slowing.

A Royal Institution of Chartered Surveyors (RICS) survey showed the number of agreed house sales in August fell for the first time since September 2012, and new buyer enquiries fell for a second month.

Both are likely to have been knocked by concerns over a looming rising in interest rates, but the survey also cited the new Mortgage Market Review (MMR) questioning and a shortage of conveyancers for the decline.

Meanwhile, chartered surveyor e.surv’s mortgage monitor showed house purchase approvals slipped five per cent in August, down 4.6 per cent from 66,569 approvals in July to 63,485 in August. E.surv suggested the two-month dip was probably caused, more than anything, by house-hunters giving up the process over summer.

Surveyors predict house prices will now rise by 2.3 per cent across the country, compared with a 3.7 per cent projection at the start of the year. The RICS survey also points to less price volatility. Nine per cent of surveyors expect prices to rise rather than fall in the next quarter, down from 51 per cent at the start of the year.

While London, the south west and the West Midlands experienced a “significant” dip in interest from new buyers over August, the market held firm in Scotland and Northern Ireland.

Simon Rubinsohn, RICS chief economist, said: “Buyer activity in the London market has been particularly pronounced but that is in a sense consistent with the move to a more sustainable market in the capital.

“Significantly, members now expect price gains over the next year to be faster outside of the capital.”