Housing demand has dropped for the first time since March 2015 as the market cools from the buy-to-let Stamp Duty rush and prepares for the impending EU referendum, according to the latest Royal Institution of Chartered Surveyors Residential Market Survey.
The RICS survey found interest from buyers dropped in April with 22% more chartered surveyors reporting a drop in demand.
There is little prospect of the market improving, according to the survey, with 8% more surveyors reporting a fall in new instructions in April with the lack of stock looking unlikely to ease in the short term.
Of the 303 surveyors polled, 22% more respondents in London expect sales to fall over the next three months
Despite the falling demand, prices are still rising outside of Central London and parts of the North of England, according to the survey.
Prices are forecast to rise across the whole of the UK over the next 12 months with 61% more chartered surveyors expecting prices to go up across England and Wales.
Looking at the lettings market, 22% more surveyors have seen a rise rather than a fall, which RICS said is likely to drive rents higher.
Simon Rubinsohn, chief economist for RICS, said: “Uncertainty is a word that features heavily in the feedback we are receiving from members responding to the survey and is contributing to the flatter trend in the latest data.
“More ominous is the expectation that both prices and rents will head materially higher over medium term despite existing affordability concerns with the supply pipeline continuing to fall short of household growth notwithstanding the various levers the government is pulling to try and drive development.”