The Royal Institution of Chartered Surveyors (RICS) is warning that expectations of further interest rate rises from the Bank of England may put renewed downward pressure on the market in the months ahead.
RICS Senior Economist, Tarrant Parsons said: "“However, it seems storm clouds are gathered, with the UK’s stubbornly high inflation likely undermining the recent improvement in activity by prompting the Bank of England to take further action through interest rate rises, leading to higher mortgage rates and ultimately reducing affordability and buyer demand."
Parsons warned that expectations of further interest rate hikes will hit demand and affordability.
RICS’s monthly health check on the property sector found some improvement in market conditions during May, with the first rise in new instructions since early 2022. House prices continue to fall in much of England, although Scotland and Northern Ireland have witnessed an uplift.
Derren Nathan, head of equity research, Hargreaves Lansdown said the report "mirrors the gloom seen in yesterday’s house price data by Halifax although there were a few glimmers of hope."
"The fall in buyer enquiries was the lowest seen over twelve months although was still down 18%. The rate of decline in agreed sales also fell sharply," he noted.
Yesterday, Halifax reported that house prices experienced their first annual fall in more than a decade last month.