London housing market cooling as sales fall
The London housing market in July cooled as sales and inquiries dropped at their fastest rate since the onset of the credit crisis, this is a further sign the London property market is now cooling.
The Royal Institution of Chartered Surveyors (RICS) said “London indicators are going into reverse” as it reported the most rapid decline in inquiries from buyers in the capital since April 2008, while the number of agreed sales fell to 16 per surveyor from 19 in June.
Across the country, a fall in the number of possible homebuyers is set to lead to a reduction in growth for house prices, the professional body for surveyors and estate agents said, as supply begins to outweigh demand.
Simon Rubinsohn, the chief economist at Rics, said: “A range of policy initiatives adopted by the Bank of England in recent months – alongside heightened expectations surrounding a turn in the interest rate cycle – has clearly had an impact on sentiment in the market.
“The shift in the mood music among potential buyers in the London market has been particularly pronounced but that is in a sense consistent with the move to a more sustainable market in the capital.”
The fall in inquiries from buyers across the UK takes the level back down to that last seen in January 2013, before the government launched its Help to Buy scheme for homeowners with small deposits.
The implementation of new rules on borrowing, introduced in April in the mortgage market review (MMR) did coincide with a fall in mortgage approvals, and Rics said this could be a factor in the fall in inquiries.