UK housing market declined in December as economy faltered, says RICS

There were widespread falls in demand to buy homes in December, according to the latest monthly residential market survey by the RICS.

The net balance for new buyer enquiries in the UK - which subtracts the proportion of surveyors reporting falls from the proportion reporting growth - was -39%, RICS’ December survey showed, slightly down on the -38% net balance in November. 

The surveyors’ body said the numbers showed “a further weakening in the sales market to end the year”. 

Agreed sales across the country reported a net balance of -41% in December, down from -36% reported in November. 

A national net balance of -42% of respondents to the survey reported a decline in prices in December, which was weaker than November’s figure of -26%.

However, 61% of respondents said energy efficient homes were holding their value.

The number of fresh property listings coming onto the market fell, with a net balance of -23% - the weakest figure for this since September 2021. 

Simon Rubinsohn, RICS’ chief economist, said the results highlighted the “emerging challenges in the housing market as new buyers grapple with more costly finance terms and uncertainty over the outlook for the economy”. 

“This is reflected in forward looking RICS indicators around both prices and activity.” The membership body said the survey showed the housing market would remain on a downward trend over the coming months. 

Rubinsohn added there were some signs that an easing in inflation pressures more generally “could provide a chink a light particularly for those looking to take their first step on the property ladder”.

Around 40% of the respondents to the survey said that there was greater interest from buyers in homes that were more energy efficient. Although, 60% indicated they had not seen this trend. But 41% noted sellers were trying to put a higher price on homes with a higher energy efficient rating. 

Mairead Carroll, RICS’ senior specialist in land and property standards, added: “It will be fascinating to see how important energy efficiency becomes to buyers over the next twelve months. We welcome the timely addition of energy-related questions to our residential survey as the cost-of-living crisis remains a growing concern.

RICS’ findings echo other reports recently, that have shown the economic turmoil created after last September’s mini-Budget and the hiking of mortgage rates has hit the housing market. 

Official stats showed house prices fell 0.3% in November last year and the Halifax showed UK house prices dropped 1.5% between November and December last year. 

Tenant demand in the lettings market increased over December with a net balance of +28% of contributors, although new landlord instructions remain on a downward trend - respondents saw a decline in December with a net balance of -24%.