House prices to fall further according to Rics estate agent survey

House prices continue to fall, according to a survey by the leading membership organization for estate agents.

The latest survey by the Royal Institute of Chartered Surveyors (Rics) found that demand from buyers is falling and that there are fewer homes coming on the market.

In addition, both sales and home prices are falling as higher mortgage rates continue to weigh on the market.

The monthly survey takes the temperature of Rics estate agent members and gives a snapshot of what’s happening on the ground in the property market right now.

Rics survey: Demand, sales, listings and price indicators remain in negative territory, estate agent members say

Home prices remain on a downward trajectory nationally, according to the survey. September’s net balance of -69 percent was almost unchanged from last month.

The net balance refers to the ratio of surveyors and estate agents reporting a rise in prices minus those reporting a fall, and can range from -100 to +100.

For example, if 79 percent say prices have fallen and 10 percent say prices have risen, that would result in a net balance of -69 percent. In this scenario, it would also mean that an additional 11 percent of respondents would say that prices were unchanged.

Although house prices are currently falling in almost all parts of the UK, the downward pressure appears to be most significant in the West Midlands and South East England.

In these areas, surveyors and estate agents reported respective net balances of -94 per cent and -91 per cent, meaning almost all those surveyed had seen prices fall.

However, although the latest net balance of -48 percent is not as negative as the -65 percent reading returned last month. This means that 48 per cent more surveyors have reported a decrease rather than an increase in prices over the past three months.

One major factor contributing to these home price declines is declining buyer demand, likely due in large part to higher mortgage rates.

Down: House prices remain on a downward trajectory nationally, according to Rics research

Tom Bill, head of UK residential research at Knight Frank, said: “A sense of predictability is returning to the UK housing market, meaning buyers and sellers can better cope with higher mortgages interest.

“House prices will continue to be under pressure, but we think most of the correction will happen this year as demand hardens.

“The general election may limit housing activity next year, but modest single-digit annual growth should return from 2025.”

The latest net balance for new buyer inquiries came in at -39 percent in September, according to industry pollsters.

According to the same metric, contracted sales also remain in negative territory, with a net balance of -37 percent among pollsters.

It’s worth noting that these numbers are slightly lower than what respondents reported in August and July — even though those months typically see less activity due to holidays.

Over the next three months, respondents continue to predict a decline in sales volumes. However, next year they expect volumes to increase again.

Along with the lack of demand from buyers, Rics members also noted that the volume of new listings coming to the sales market is falling.

New instructions are reported to have fallen in each of the past three months, with average inventory levels on estate agents’ books remaining broadly stable at 38 properties since July.

Feedback also continues to suggest that the number of market valuations carried out recently is below that of last year, meaning that any immediate changes in the levels of supply available to the market look unlikely.

Down: Each estate agent branch averaged fewer than 15 sales in the past three months, according to Rics research

What about the rental market?

The mismatch between the number of homes available to rent and the number of tenants who need housing is causing rental prices to rise, according to the Rics report.

In the rental market, a net balance of +43 percent of respondents said they saw an increase in tenant demand in September.

At the same time, the net balance of those reporting growth in landlords offering new properties for rent is -24 percent.

Against this backdrop, rents are expected to rise, with surveyors and agents predicting around 5 per cent average growth in UK rental prices over the next twelve months.

Tom Bill of Knight Frank added: “The spread of red tape and tax on landlords has contributed to tight supply and rapidly rising rents in recent years.

“The situation is exacerbated by higher mortgage costs for buy-to-let owners, the prospect of further regulation and demand from tenants who cannot become first-time buyers.

“Measures designed to discourage landlords have had the unintended effect of causing financial pain for tenants.”