The Royal Institution of Chartered Surveyors (RICS) UK Residential Market Survey for July 2023 paints the picture of a housing market continuing to lose ground to the effects of higher mortgage rates.

At the national level, new buyer enquiries posted a figure of -45%, like last month’s figure of -46%. As a result, this metric continues to signal a sharp downturn in buyer demand following the latest escalation in mortgage interest rates. When viewed at the level of the English regions and the four nations, all parts of the UK display a firmly negative return for new buyer enquiries over the month.

In keeping with the deteriorating demand backdrop, a net balance of -44% of respondents noted a decline in agreed sales during July. This is down from a figure of -36% previously and represents the weakest reading for the sales measure since the early stages of the pandemic.

Looking ahead, near-term sales expectations are increasingly subdued, posting a negative reading of -45% in July. This is substantially weaker than the respective net balances of -38% and -11% in June and May. Furthermore, on a 12-month view, sales volumes reports a net balance of -25%, indicating a decline, although this reading is marginally less downcast than a reading of -31% in June.

Looking at trends in fresh listings coming onto the sales market, the headline new instructions net balance slipped to -13% in July, compared to -3% in June.