Further evidence that the housing market is cooling came via the latest survey by the Royal Institution of Chartered Surveyors (RICS), which shows that new buyer demand for property in June rose at its slowest pace since early 2013. In London demand from buyers declined for the second consecutive month. The net balance of surveyors expecting house prices to rise, rather than fall, over the next three months declined to 26%, down from 46% in May.
RICS said that the slowdown was likely to be a consequence of tighter mortgage market procedures introduced in April this year, known as the Mortgage Market Review (MMR). "Rhetoric from key officials at the Bank of England (BoE), including Mark Carney, alongside the consequences of the introduction of the MMR are already slowing momentum, particularly in London," said Simon Rubinsohn, RICS chief economist.
According to RICS, the tougher rules introduced by the MMR were 'having a drag' on activity. Rubinsohn said the measures introduced by the BoE would have an "immediate influence on the market."
He added: "Buyer enquiries in the capital are now slipping back which suggests that the very sharp upward move in prices will flatten over the coming months."