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Signs housing market demand 'may be slowing'

There are signs that the frenzied activity in the UK housing market may be starting to cool off, a new survey reveals.According to the Royal Institution of Chartered Surveyors' (RICS) UK Residential Market Survey, the rate of increase in the number of first-time buyers slowed during February - a pattern which occurred in every part of the country, with the exception of Yorkshire and Humberside, where demand had been flat during January.It was the slowest rise in prospective buyers since March 2013.Prices continued to rise, however - albeit at a slower rate than during previous months. Some 45 per cent more chartered surveyors saw prices rise rather than fall in February, and the cost of a home has now risen across the country for 11 consecutive months.Activity was particularly limited in the south-west, which has been badly affected by adverse weather. This served to reduce both the number of homes coming on to the market and quell demand. RICS says it is uncertain what the long-term implications of the flooding will be.RICS chief economist Simon Rubinsohn said that while the slowdown does not signal an end to the recent increases in activity, it suggests pent-up demand is beginning to exhaust itself."The ongoing issue that we are facing, however, is the lack of homes coming onto the market," he commented. "Yes, it is true that more and more are being built, but supply is simply not enough properties to satisfy demand. As a result, prices are likely to continue to move higher making it ever harder for people to take an initial step foot onto the property ladder."Survey respondents predicted a rise in both prices and transaction levels with the arrival of the summer months, which are traditionally busy months for the housing market.The Office for National Statistics recently revealed that the average cost of a home in the UK reached £250,000 during December 2013. Prices rose 5.5 per cent on the previous year's figures.  

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