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RICS: Momentum slows in housing market

Further signs that the housing market is beginning to lose momentum have come with the publication of the latest residential market survey from the Royal Institution of Chartered Surveyors (RICS).Demand across the UK fell for the third month in succession, the organisation revealed. London was particularly hard hit, with prospective new buyer demand declining for the fifth consecutive month - a trend not seen since April 2012.Simon Rubinsohn, chief economist at RICS, described the easing of the upward pressure on prices in the capital as a "healthy development"."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," he explained.Scotland also witnessed a significant shift in buyer attitudes, with a net balance of six per cent more surveyors reporting a drop in the number of interested buyers (compared to a net balance of 49 per cent seeing more interest in August). RICS attributed this to the effects of the Scottish referendum.There was virtually no change in the stock coming onto the market in September (a net balance of minus one per cent). Several surveyors reported "a return to more sensible prices" as offers below asking price were received for properties remaining on the market for longer.Another significant trend was a fall in 12 month member price expectations for larger properties (three and four or more bedrooms). Since the beginning of the year these have dropped from 3.8 per cent to 2.2 per cent for three-bedroom properties and from 3.5 per cent to two per cent for four or more bedroom properties. According to RICS, this is probably a response to the political rhetoric surrounding the possible introduction of a mansion tax.Despite the slowing of momentum, surveyors remain optimistic about the coming months. Values are only expected to decrease in London, while prices across the rest of the UK are still expected to rise by on average 2.1 per cent over the year. 

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