House prices came under increased pressure in April, with signs of a widening regional divide, according to surveyors.
A net balance of 34% of property professionals reported house prices falling rather than rising, deteriorating from a balance of 25% of professionals who saw this in March, the Royal Institution of Chartered Surveyors (RICS) said.
The report highlighted a widening divide, with stronger downward pressure on prices reported in London, the South East, East Anglia and the South West.
In northern England, house prices were still “marginally positive” while prices were also still increasing in Scotland and Northern Ireland, RICS said.
Higher mortgage rates continued to dampen home buyer demand in April, with signs that the conflict in the Middle East is also affecting confidence, the report added.
A net balance of 34% of professionals reported new buyer inquiries falling rather than rising.
Agreed sales also remained weak, with a net balance of 36% of professionals seeing falls.
Expectations among professionals for sales in the months ahead were also subdued, but were less negative for 12 months’ time compared with the next three months, the research indicated.
RICS said there were also signs the pipeline of homes being listed may weaken.
The rental market continued to show demand outpacing supply, with tenant demand rising while landlord instructions fell.
Tarrant Parsons, head of market research and analysis at RICS, said: “April’s results show a housing market still in the grip of macro headwinds stemming from the Middle East conflict.
“Recent warnings from the Bank of England that interest rate rises may be required to tackle renewed inflation, driven by elevated oil prices and disrupted supply chains, underline the challenging environment facing buyers.
“Until there is a clearer path for inflation and borrowing costs, activity and sentiment look set to remain subdued, particularly across southern England and London where affordability pressures are most acute.”
