A report from the Royal Institution Of Chartered Surveyors has predicted that a combination of factors could lead to the end of a 13-year boom period for the housing market.
The RICS Residential Market Survey reported that new buyer enquiries have fallen for a fifth consecutive month, although it has noted that due to limited supplies of new houses that the average house price has remained relatively consistently high.
The report’s findings that price expectations are heading towards a negative prediction over the next year were not necessarily surprising given the intensity of the housing market over the past two years.
With a huge rush to buy new homes and conveyancing brokers working hard to complete their required checks, the housing market had reached unparalleled peaks in the first half of 2022, with many wondering when the fall would come and what would cause it.
Some, such as Rightmove’s House Price Index had predicted that the housing market’s acceleration would slow down as early as the start of 2022 when the stamp duty holiday that had acted as a catalyst for the market in 2020 was set to be discontinued.
The market retained its resilience and house prices continued to increase for the first half of 2022, primarily because demand had considerably outstripped supply and an expected increase in sellers as a result of restrictions being lifted ultimately did not materialise.
However, the higher-than-expected increase in the energy price cap and other cost of living increases put a strain on the market, as did seven consecutive increases in the Bank of England’s interest rate, which has since led to fixed mortgage rates topping six per cent.
This was compounded by the fiscal event on the 23rd September, which led to over a thousand mortgage products being withdrawn from the market amidst general volatile UK market conditions.
