House prices continued to rise across the UK in June, according to the latest (June 2022) RICS Residential Market Survey, but the pace of growth is slowing amid fewer new buyer enquiries which is to impact sales.

The new buyer interest net balance slipped for the third successive month, with -27% of respondents reporting a fall in interest from would-be buyers. Interestingly, London appears to be a little more resilient as +7% of respondents reported an uptick in enquiries in the past month.

An easing in demand from new buyers saw the volume of sales over the month dip, and -13% of respondents reported a fall in newly agreed sales. Looking ahead, -9% anticipate a fall in transactions for the coming three months. Further out, the 12-month forecast is also negative (-21% up slightly from -24% in May). Anecdotally, respondents are preparing for the economic changes to make an impact with many suggesting that the market is starting to cool off.

The lack of new stock also continues to hamper market activity, with the picture across the UK more of less flat regarding new properties being listed for sale. Moreover, respondents are reporting little change in market appraisals compared to this time last year, suggesting the tight supply backdrop is unlikely to change drastically in the short term.   

It is the lack of stock that means that house prices continue to drift higher despite the recent cooling in demand. This month +65% of respondents cited an increase in house prices, albeit this is down from the recent April high of +78%, but this is still comfortably above the long-run average of +13%. Looking further out, +37% of respondents foresee prices continuing to climb over the next 12 months, but again this is down from the February high of +78%.