Property market slows to lowest level in a year

Property buyer numbers have dropped to their lowest rate in a year, however there is still a lack of homes coming onto the market that is holding up prices, new data has revealed.

According to the Royal Institution of Chartered Surveyors’ February residential market survey, buyer numbers have dropped off across most areas of the country, with only Yorkshire and Humberside seeing “meaningful increases in buyer growth” on the back of a flat January.

Activity was particularly limited in south-west England where flooding and adverse weather conditions appear to have significantly hit both the supply of properties coming up for sale and buyer demand.

Article continues after advert

It remains to be seen what impact the floods will have on local and regional markets over the coming months, Rics states.

However, despite the fall in buyers, it adds that property supply is still falling “well short” of required levels. This means property prices continued to rise in February, although at a slower pace than in previous months.

Last month 45 per cent more chartered surveyors saw prices rise rather than fall. The cost of a home has now risen across the country for eleven consecutive months, Rics notes.

Looking ahead, chartered surveyors predict both prices and transaction levels to continue to increase as we enter the summer months where the market traditionally starts to pick up.

Simon Rubinsohn, Rics’ chief economist, said: “The growth in buyer numbers that we’ve seen for some months started to slow down in February, as the surge in interest sparked towards the end of last summer began to level off.

“While this certainly doesn’t mean an end to the increasing activity we’ve been seeing recently, it does suggest that the pent up demand generated throughout the downturn is gradually exhausting itself.

“One other factor influencing behaviour over the past month may be the weather as rain, wind and, in particular, floods tend to mean fewer people are willing to actually get out there and view houses.

“The ongoing issue that we are facing, however, is the lack of homes coming onto the market. Yes, it is true that more and more are being built, but supply is simply not enough properties to satisfy demand. As a result , prices are likely to continue to move higher making it ever harder for people to take an initial step foot onto the property ladder.”