Buyers are facing hesitant sellers and a continuing shortage of properties, Chestertons claims.
The agency reported that the number of property viewings conducted in October increased by 5% compared with September and there has also been a 28% increase in sales during the period as buyers rushed to safeguard their fixed-rate mortgages.
Whilst buyers in London appear highly motivated, many would-be sellers seem to be waiting for more economic and political certainty before putting their properties on the market, Chestertons said.
The agency said it noticed a 34% drop in the number of market appraisals carried out in October compared with September.
This pause for breath, warns Chestertons’ head of sales Matthew Thompson, is “likely to cause a shortage of new properties coming onto the market in the New Year and will help support property prices in many areas.”
He added: “We are not currently seeing or expecting a substantial drop-off in demand from buyers or the rapid fall in prices that other UK-wide figures are suggesting.
“One of the unique factors of the London market is the number of cash buyers, who are partly insulated from the current high mortgage rates. Another factor is London’s enduring popularity with overseas buyers, who are able to benefit from the relative weakness of sterling against the US dollar.”
This pause for breath, warns Matthew Thompson, is “likely to cause a shortage of new properties coming onto the market in the New Year and will help support property prices in many areas.”
It comes as one of the UK’s largest housebuilders has warned of an increase in cancellation rates and a dip in sales in the latest signal of a property market slowdown.
A trading update from Persimmon yesterday – covering the period 1 July 2022 to 7 November 2022 -claimed rising mortgage rates and economic uncertainty are hitting demand.
While the company said it remains well-positioned to deliver its full year volume expectations of between 14,500 and 15,000 units, the update said the past six weeks have seen cancellation rates increase to 28% from 21% in the preceding 12 weeks from 1 July 2022, introducing some uncertainty.
The average net private weekly sales rate per outlet has fallen from 0.6 to 0.48 in the previous six weeks, blamed on “the uniquely disruptive political conditions and deteriorating economic outlook since September.”
The Average selling price for private reservations over the same period reduced by around 2% compared with the 12 weeks commencing 1 July, the update said.
Dean Finch, group chief executive, for Persimmon, said: "Rising interest rates and broader economic uncertainty are clearly impacting mortgage lending and customer behaviour and this is reflected in our recent weekly sales rates and forward sales position.
“Persimmon enters this more challenging period as a five-star builder, with average selling prices below the market average, high quality land holdings, and a robust balance sheet. The recent strengthening of our land holdings with disciplined investment will maintain our industry-leading embedded margins.”