Rising borrowing costs continue to add pressure to the housing market in Wales, according to surveyors. The latest market survey from the Royal Institution of Chartered Surveyors (RICS) showed more homes came onto the market in Wales in June, but fewer buyers are actively looking purchase as mortgage rates increased.
While house prices are expected to fall further over the next three months. The survey reported a net balance of 16% of property professionals in Wales said that instructions to sell rose during the month of June. This was up from 9% in May and the sixth survey conducted where the figure has been in positive territory.
However, a net balance of -32% reported a fall in sales and -30% reported a fall in new buyer enquiries. A net balance of -6% of property professionals anticipate sales to continue to fall over the next three months - dramatically down from 21% in May.
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They also expect house prices to reduce in the next three months, with a net balance of -54% anticipating a fall between July and September.
Net balance is calculated by the proportion of survey respondents reporting a rise minus those reporting a fall. A positive net balance implies that more respondents are seeing increases than decreases, while a negative net balance implies that more respondents are seeing decreases than increase.
Paul Lucas of R.K.Lucas & Son in Haverfordwest said: “Sales instructions are increasing whilst actual sales are slow.”
John Caines of Payton Jewell & Caines Ltd in Bridgend said: “The market is now more price conscious than previous years, with the impact of higher mortgage rates reflected in achieved selling figures.”
Melfyn Williams of Williams & Goodwin in Anglesey said: “The property Market continues to be active with property in the right location at the right price selling well. Houses initially priced too high could now result in them selling for less in the long run. It’s important now to price right and choose the best method of sale to suit circumstances.”
RICS chief economist Simon Rubinsohn said: “The latest increase in interest rates and the impact this has already had on mortgage rates is clearly visible in the key RICS metrics regarding buyer enquiries, sales and prices which have all retreated over the past month.
“Inevitably in this environment, activity levels are likely to remain relatively subdued. However, an important message coming back from RICS agents is around ensuring prices are set with an eye on the market conditions of today, rather than the recent past; when this is done, sales are taking place.
“It is also worth bearing in mind that house prices are only very modestly down on their recent highs and well above where they stood prior to the onset of the pandemic.
“Further declines are possible but need to be seen in the context of the previous strength in the market. Additional questions included in the latest survey also provide some support for the notion that, on balance, properties with better energy efficiency credentials are holding their value better than some others.”
