The number of new buyers and sales in the housing market fell again in September, with signs of sharp falls in demand in London, according to an influential industry body.
A net balance of 20 per cent of surveyors said they had noticed a fall in demand during the month, the Royal Institution of Chartered Surveyors (Rics) reported today.
The shift in buyers’ interest rate expectations, ahead of a crunch decision from the Bank of England in November, has been one contributor towards buyer caution, Rics said. However, in pricier regions such as London affordability is one of the main concerns, according to Simon Rubinsohn, Rics chief economist.
London and the South East saw the sharpest decline in sales nationwide, the data showed. The balance of surveyors reporting increasing prices in London is the lowest of any region, remaining in “firmly negative” territory.
At the same time, 15 per cent more respondents reported a fall in sales rather than a rise, the lowest level since July 2016, the immediate aftermath of the EU referendum.
The “stark divergence” across the country amid wavering demand for houses in London is partly “a reflection of affordability constraints hitting the higher-priced segments of the market”, said Rubinsohn.
The perceived weakness in the London and South East property markets drove sentiment for the next three months into negative territory, Rics said, with an eight per cent swing to more respondents expecting prices to fall at a national level.
Brian Murphy, head of lending at the Mortgage Advice Bureau, said: “It would appear that London and the surrounding traditional ‘commuter belt’ continues to lag, which is consistent with other data sources suggesting a similar cooling in the capital and South East.”
Nevertheless, in the nation as a whole there are still signs of a shortage in the supply of homes, Rics reported, with “evidence of shortage of stock both in the new build and second hand market”.