Brits turning away from new property purchases

Consumers are increasingly turning away from purchasing new property thanks to high prices and mortgage costs.

A survey published by the Royal Institution of Chartered Surveyors (RICS) found that in London in particular, both sales and new buyer demand fell more sharply than elsewhere, with enquiries falling at their fastest rate since April 2008. A net balance of ten per cent more respondents also reported an increase in prices.

At the same time, the cost of housing has gone up. The RICS survey found that 49 per cent of those polled reported an increase in the cost of property in July.

In addition, prices are still projected to rise nationally over the next year and are expected to increase by 2.6 per cent over the next 12 months, compared with around four per cent at the start of the year. 

Commenting on the research, Simon Rubinsohn, RICS chief economist, said: "A range of policy initiatives adopted by the Bank of England in recent months alongside heightened expectations surrounding a turn in the interest rate cycle has clearly had an impact on sentiment in the market.

"Elsewhere around the country, the market in general is showing a greater degree of resilience, but that largely reflects the fact that in some areas the recovery has only recently taken hold and affordability is rather less stretched. Significantly, members now expect price gains over the next year to be faster outside of the capital, than in it."

But while demand for mortgages has decreased, the appetite for rental properties has increased. Research published by independent property network Move with Us revealed that homes in Greater London and the south-west are currently receiving the highest number of viewings in the country.

The average number of viewings per rental property in both Greater London and the south-west is 13, a ten per cent increase year-on-year.

Published 19th August, 2014

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