The UK property market continued to weaken in October, as the jump in mortgage rates put off potential buyers, according to an industry survey.
Sales and inquiries from buyers both dropped last month, as house price growth ground to a halt, the Royal Institution of Chartered Surveyors (RICS) reported.
New buyer enquiries fell sharply in October, RICS said, which is the sixth monthly drop in a row while the number of new listings coming onto the market also fell.
Surveyers across the country now predict that prices will decline over the next year.
Simon Rubinsohn, RICS chief economist, explained: “The latest feedback to the RICS survey provides further evidence of buyer caution in the face of the sharp rise in mortgage costs.”
“As a result, the volume of activity is likely to slip back over the coming months and realistic pricing is now much more important to complete a sale.”
Gabriella Dickens, senior UK economist at Pantheon Macroeconomics said the survey “shows that the downturn in the housing market is gathering momentum.”
“It was inevitable that demand would eventually buckle under the dual pressures of surging mortgage rates and falling real incomes” she said.
Dickens’ also pointed out “ households’ real disposable incomes will be squeezed further next year by the watering down of government support for energy bills in April, new austerity measures, and job cuts.”
She forecast house prices to fall by about 8% over the next year, reversing one-third of the increase since the pandemic.