According to the Royal Institution of Chartered Surveyors (RICS), a four-month wave of growth in homebuyer inquiries has come to an end as the government’s stamp duty vacation comes to an end.
Demand for new buyers contracted in July, with a -9% net balance falling in RICS ‘latest housing market survey, almost 20% less than its + 10% balance in June.
The previous four months have all seen positive net balances as the stamp duty holidays have contributed to an ongoing boom in the UK property market.
Planned sales also fell in July, with -21% of respondents reporting a decline, with sales volumes slowing in Yorkshire & the Humber, East Midlands and East Anglia in particular.
But as the number of new entries fell from a balance of -35% in June to -46% last month, house prices could continue to rise.
A balance of + 78% of those surveyed indicated rising property prices in July, although this was slightly below the + 82% in May and June.
The north of England, Wales and East Anglia saw the strongest growth in house prices, with London the weakest with a net balance of + 45%.
Nationally, a net balance of + 66% forecasts that prices will continue to rise in the next twelve months, compared to + 56% in June.
RICS chief economist Simon Rubinsohn said the totals showed the property market remained strong despite the drop in buyer inquiries in July.
“Although the stamp duty cut is beginning to have some impact on the RICS activity indicators, the overall sentiment of the market remains firm, with the metrics that track price expectations showing little sign of fluctuation.”
He added that the survey showed that buyers still place a high value on the square, as many employers’ flexible work models allow for more flexibility in terms of location.
Last week, the latest RICS Construction and Infrastructure Survey found that 50% of respondents said private housing construction increased in the second quarter of this year, up from 39% in the first quarter.
However, the survey also raised concerns about material and labor shortages: 64% of respondents said difficulties in finding labor will limit activity in the second quarter, compared with 42% in the first quarter.