June saw house price growth easing to half the pace of May?s rate, as interest rates begin to bite in earnest, according to the latest data from the Royal Institute of Chartered Accountants (RICS).
New buyer enquiries have declined at the fastest rate since February 2006, says RICS, as first-time buyer affordability was hit by the ongoing decisions to raise interest rates: enquiries fell in all regions apart from Wales, West Midlands and Scotland.
New instructions to sell property also appear to have fallen sharply, says the report. This was in part due to many vendors bringing forward their instructions into May in order to avoid the upfront costs of Home Information Packs. In addition to this a general slowdown in the market can be inferred from the third consecutive monthly fall in the ratio of completed sales to stock of available property for sale.
Four interest rate rises and the prospect of more to come have dented surveyor confidence, according to the report, with surveyor confidence in the sales outlook also almost halving, falling to the lowest level since June 2004.
?House prices have finally started to cool significantly for the first time since the recent mini boom in the housing market got underway in 2006,? said RICS spokesman Ian Perry. ?Interest rate hikes have again begun to affect psychology of the market with potential new buyers starting to think twice before buying a home.
?The July rate increase may not mark the peak of the current interest rate cycle and earlier rate rises have yet to fully filter through. A softer landing for the housing market is in store as we move into the autumn.?