British Agents Flag Softest Sales Outlook Since July 2023

RICS survey: sales and prices slipping

The Royal Institution of Chartered Surveyors' reading for expected sales over the next year dropped to minus 17 in October, marking the weakest level since July 2023. RICS also noted a second consecutive decline in its house price measure, with agents indicating values could fall by roughly 1% over the coming 12 months.

Surveyors said agreed sales declined in October, and buyer demand stagnated or fell in every part of the country. Price pressure was most intense in London, East Anglia, the West Midlands and the South East.

Mortgage costs, energy shock and market signals

An energy shock tied to the Iran war is squeezing the housing market by cutting into disposable incomes and pushing up borrowing costs. Moneyfacts shows key mortgage rates hovering near 6%, compared with 4.83% before the conflict began. Economists and investors expect the Bank of England will continue increasing interest rates to curb inflation.

Why it matters for your portfolio

RICS's Tarrant Parsons said buyer demand remains subdued and respondents expect a weaker year for sales, with elevated mortgage rates likely to keep weighing on the market.

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The broader backdrop is wobbling too. Nationwide Building Society noted that home prices were flat in October, while BOE figures indicated September appetite for mortgages was the lowest since December 2023. Howard Davis, a Bristol-based estate agent, said, "House prices are falling, mortgage rates are climbing and buyer confidence is an all-time low." "We continue to lower prices to attract buyers." For investors, that combination can ripple through homebuilders, lenders and other rate sensitive corners of your portfolio.

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