Drop in homebuyer enquiries may point to cooling market

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The Independent Online

The number of homebuyers flocking into estate agents' offices fell sharply last month, according to the latest report to point to a slowdown in the housing market.

The number of homebuyers flocking into estate agents' offices fell sharply last month, according to the latest report to point to a slowdown in the housing market.

It was the first fall in new buyer enquiries since December, the Royal Institution of Chartered Surveyors said. The number of surveyors reporting a fall in new business outnumbered those recording a rise by 25 per cent.

Rics also reported a sharp fall in the number of its members expecting prices to carry on rising. Only a third expect further jumps compared with three-quarters just two months previously.

Ian Perry, Rics' national housing spokesman, said: "Some of the fall-off in enquiries will be seasonal but there is growing anecdotal evidence that buyers are becoming reluctant to meet high prices. This could be reflected in prices over the coming months."

Milan Khatri, the organisation's chief economist, said he believed reports in May and June that interest rates were on their way up had put the brakes on the market.

"Speculation over rate rises and the weakness of the stock market seem to have contributed to weaker buyer enquiries," he said. "People were also worried about a possible re-run of the 1980s crash."

He said the recent surge in prices had also had an impact as it had put properties, especially in London and the South-east, beyond the reach of many buyers.

It is the latest tentative sign that the market may be running out of steam after the bull run of the past five years.

Yesterday Woolwich bank said optimism in the market had declined for the first time since November. Earlier this month the major house builders reported signs that growth in prices was starting to slow.

However Rics' survey showed that prices rose strongly in June, despite the fall-off in new inquiries. The continuing shortage of properties for sale pushed prices higher, with the annual rate of growth hitting its highest level for two and a half years. The number of houses on agents' books fell for the fifth month in a row to a fresh 23-year low.

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