The property market's recovery has faltered due to rising mortgage rates, which are deterring potential homebuyers, according to the latest survey from The Royal Institution of Chartered Surveyors (RICS).

After three consecutive months of increased activity, new homebuyer enquiries declined in April. RICS reported a net balance of 1% of property professionals observed a drop in enquiries, a reversal from the 6% increase in March.

The downturn was most pronounced in London and the southern regions of England, where buyer demand significantly weakened. Concurrently, the rise in mortgage rates has made buyers more cautious, contributing to a dip in house prices last month, with the net balance of professionals reporting price declines remaining steady at 5%.

The Bank of England is expected to maintain interest rates today, but the outlook remains bleak with a net balance of 1% of professionals anticipating a decrease in house sales over the next three months, the gloomiest forecast since October 2023.

Meanwhile, major lenders have been raising their mortgage rates over the past two weeks,resulting in generally stagnant or slightly negative house price trends across England, although property values in Northern Ireland and Scotland are still rising.

Despite the current downturn, 33% of surveyed professionals expect an increase in house sales over the next year. Additionally, the market saw a boost in new listings in April, with 23% noting an increase in instructions to sell - the most optimistic indicator since September 2020.

In the rental sector, while tenant demand is waning, there remains a scarcity of landlord instructions. Nevertheless, the average stock levels at rental branches have reached a three-year high, with 43 properties per branch.

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