Following the latest report from the Royal Institution of Chartered Surveyors’ (RICS) we’re left wondering if the housing market in the capital is starting to lose its heat as findings from the report show that the number of buyer enquiries have plummeted to their lowest levels since the financial crisis in 2008. This, coupled with a decreasing number of house sales in July, which went from an average of 19 per surveyor in June to 16 per surveyor in July, suggests that supply could be starting to outstrip demand.
It was reported earlier by ONS (Office for National Statistics) that collectively, UK house prices rose by 8% in the year to the end of March – 17% of this was driven by rises in London. The hike in prices was believed to be due to the lack of affordable supply and a rising number of first-time buyers keen to take out fixed-rate mortgages prior to the pending Bank of England’s base rate rise.
It’s thought that one of the reasons for the recent cooling of the property market in the big smoke is due to the newly imposed lending criteria which came into place as part of the Mortgage Market Review (MMR) in April earlier this year. So it seems that the stricter guidelines are having the desired effect on the ever-growing housing bubble.
What does this mean for UK’s outer regions? RICS appeared to be quite confident in its report that property prices would start to climb more rapidly outside of the capital, predicting that the growth in annual house prices in London would drop from 4.7% to 4.6% – which is now slower than its forecast for the rest of the UK.
Amongst other things, there’s also been talk of the Bank of England’s cap on loan-to-income ratios which is set to be implemented later this year in October. This could also further stabilise the over-heated London property market.
So is there fresh hope for prospective house-buyers that the cost of buying in the capital may become more reasonable in the coming months?