House prices have tumbled while rents have jumped as higher mortgages hit homebuyer interest.
The Royal Institution of Chartered Surveyors (RICS) said that its house price net balance – which measures the difference between the percentage of surveyors seeing rises and falls in house prices – sank to -25 in November, the lowest since May 2022.
A net balance of 35% of property professionals saw a pick-up in rental demand in November, while a balance of 27% reported a decline in landlord instructions.
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The mismatch between demand and supply continues to drive rents higher, with a net balance of 43% of contributors anticipating rental prices moving higher over the coming three months.
This is because the number of tenants is continuing to increase, while fewer landlords are offering properties.
“The overall tone of the latest RICS Residential Survey is understandably more downbeat than previously, reflecting the uncertain macro environment and the higher cost of mortgage finance,” RICS chief economist Simon Rubinsohn said.
Prices were said to be retreating across most parts of the UK, according to RICS, with the latest feedback especially downcast in the south east and south west of England.
For now, prices continue to climb in Scotland and Northern Ireland, but the pace of growth is significantly weaker compared with earlier in the year, the report said.
One property professional, based in the West Midlands, said: “Definitely signs that the troubles in the economy are now impacting sales in the housing market.
“Many more chains are breaking, everything is taking longer to sell and prices are starting to fall. More challenging times lie ahead.”
Read more: UK average house price drops to £285,579 in biggest fall since 2008
Another, based in Northern Ireland, added: “Many buyers are adopting a ‘wait and see approach’.
“Now the autumn statement is out of the way, we should see normality return, albeit after the Christmas period is over.”
An Edinburgh-based estate agent added: “Despite the economic situation, we have also seen very few fall throughs in agreed sales over the last three months.”
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