The closely-watched RICS housing market survey reports the first slowing in house price rises and new buyer demand in almost a year today. Tentative evidence that the mini-boom is over?
Maybe - but it’s very tentative since this is a slowdown in the rate of increase rather than the market going into reverse. After a year of increases in the balance of surveyors saying that prices are rising rather than falling, the balance fell from +35% in November to +30% in December. Similarly the balance of surveyors reporting increases new buyer enquiries slipped back to +20, the slowest pace of increase since January 2009.
The slowdown is confirmed in the balance of newly agreed sales and sales expectations, which both show less growth, and perhaps even more significantly the recovery in supply into the market seems to be holding up. The balance of new vendor instructions increased for the seventh consecutive month and matched November’s +17, which was the highest since May 2007.
However, a balance of +13% of surveyors still expect price rises over the next three months. Granted they have a big vested interest in that happening but the triggers for a downturn - another increase in unemployment, more forced sales, rising interest rates - remain unprimed.
There’s not much good news for affordability and first-time buyers either in the DCLG house price index for November published today. The annual rate of increase went back into positive territory for the first time since May 2008 and the increase has been particularly marked in properties bought by first-timers rather than previous owner-occupiers.
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