Homebuyer enquiries and sales plummet amid cost-of-living crisis, say surveyors

Homebuyer enquiries and sales plummeted in August due to the “deteriorating macro-economic backdrop” according to the Royal Institution of Chartered Surveyors (RICS).

The RICS’ monthly residential market survey showed net buyer enquiries slipped to a net balance of -39% in August, down from -26% the previous month and 12% year-on-year. It was the lowest reading since April 2020 in the midst of the pandemic lockdown. A minus balance means more surveyors reported a drop in enquiries than reported a rise (see box below).

New properities listed saw a net balance of -15%, down from -6% last month, while the figure for sales also fell to -22% compared to -13% in July.

Despite this, more surveyors reported house price increases than decreases in August with a net balance of +53%, down from +78% in April.

Tarrant Parsons, senior economist at RICS, said: ““Concerns over the economic backdrop and rising interest rates continue to take their toll on market momentum, with strong activity early in the year now giving way to a more subdued picture.

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“Moreover, given projections for the UK economy point to a potential recession emerging towards the end of 2022, respondents envisage housing sales continuing to slip in the coming months.

“For the time being at least, the lack of stock available on the market is still providing support to house prices, which continue to rise, even if the pace of growth has cooled over recent months.”