House prices continued to fall towards the end of 2022, according to the Royal Institution of Chartered Surveyors (Rics).
The Rics house price balance fell to -42 in December compared to -26 in November, and meant that 42 per cent of surveyors who took part in the survey noted a fall rather than a rise in house prices that month.
This fall in sentiment is the highest in 13 years in December was echoed across all regions in England, with East Anglia and the South East seeing the sharpest rates of decline.
House price readings across Scotland and Northern Ireland were still positive although not as strong as they were during last summer.
The latest survey also showed a fall in new buyer inquiries rather than increases and the number of fresh property listings coming onto the sales market also fell, with a decline in agreed sales.
Surveyors in the North West of England, Scotland, Wales and London all claimed to have experienced a quiet month in December.
The December survey also asked if property professionals were seeing more interest in homes that weremore energy efficient.
Around 40 per cent of those surveyed said they were although 60 per cent said they had not experienced increased interest.
However, 61 per cent of survey contributors stated that highly energy efficient homes were holding their value.
Looking at the lettings market, tenant demand increased over December according to a net balance of 28 per cent of contributors.
However, this was the lowest rental market reading since February 2021, and suggests that the pace of demand growth is slowing across the rental market.
On the supply side, new landlord instructions remain on a downward trend, with a net balance of 24 per cent of professionals seeing a decline in December.
Near-term expectations continue to point to rents being squeezed higher, Rics added.
Simon Rubinsohn, Rics chief economist, said: “The latest Rics residential survey highlights the emerging challenges in the housing market as new buyers grapple with more costly finance terms and uncertainty over the outlook for the economy.
“Meanwhile, feedback around the lettings market once again demonstrates the need for some concerted thinking about how to create a thriving sector that caters for both the private and ‘affordable’ renter.”
Mairead Carroll, senior specialist in land and property standards at Rics said: “It will be fascinating to see how important energy efficiency becomes to buyers over the next 12 months.”
Tomer Aboody, director of property lender MT Finance, said: “The ongoing impact of cost-of-living increases, along with mortgage rates, has led to a weakening in sales in the property market, as expected.
“With buyers and homeowners waiting to see what the next few months hold, it’s not surprising that lower transaction levels are being seen. Fewer people are prepared to take the plunge and make a commitment as significant as buying a house at this time.
“With some possible optimism coming from a couple of months lower inflation, along with government plans to reduce it by half, there could be light at the end of the tunnel. As the impact of this filters through, it could well bring some much-needed confidence back to buyers and sellers alike.”
And agencies – Press Association