Momentum slows in housing market, says Rics

Prices are still expected to rise, but not at the rate seen earlier in the year

Momentum in the UK housing market has faded with house price growth slowing to the same level as 16 months ago, surveyors say.

Demand from new buyers fell for the third month in a row in September, a survey from the Royal Institution of Chartered Surveyors (Rics) suggested.

In London, "caution took a particular toll", Rics said, where demand was down for the fifth consecutive month.

Rics members expected prices to drop in London in the next three months.

Most surveyors still see prices rising elsewhere but said the market was far more subdued.

"Part of this is down to the Bank of England becoming more vocal about the risks, part of this is down to affordability, part of this is down to the new mortgage rules and part of this is down to expectations of higher interest rates," said Simon Rubinsohn, chief economist at Rics.

Yet, Campbell Robb, of housing charity Shelter said: "The prospect of a stable home is becoming a distant dream for far too many young people and families."

The Rics survey comes after the mortgage lender Halifax predicted that annual house price growth in the UK would moderate during the rest of the year.

On Tuesday, the Bank of England's Credit Conditions Survey suggested that the supply and demand for mortgages fell in the three months to early September.

Latest figures from the Council of Mortgage Lenders (CML) showed that lending to first-time buyers declined in August compared to July by 4%. Lending to home movers also fell, down by 3% over the same period, the CML said.

Rics said that activity in the housing market in Scotland had fallen temporarily as the independence referendum campaigns hit full pace.

Discussions of a mansion tax at some party conferences has also led Rics members to lower their price expectations for larger properties.