Housing sales are forecast to have fallen to the lowest point in over three years as increased mortgage rates drive down buyer demand and the property market continues to cool.

According to the Royal Institution of Chartered Surveyors’ (RICS) latest findings in its UK Residential Market Survey, the outlook for sales has slipped to the lowest point since July 2023, with October showing subdued demand and falling agreed sales.

RICS said respondents to the survey “now expect both sales activity and prices to soften over the next twelve months.”

The number of enquiries from new buyers has remained at the same level since September, with “virtually all parts of the UK reporting either falling or stagnant demand.”

A decline in agreed sales worsened, falling to its lowest level in three months.

Sales in the next twelve months are also expected to fall, which RICS said is “the most pessimistic assessment since July 2023.”

London, East Anglia, the West Midlands and the South East recorded weaker housing price trends than the headline average.

RICS Head of market research and analysis, Tarrant Parsons, said demand for buying houses “remains subdued” with respondents “bracing for a weaker year ahead for sales given the persistent macroeconomic challenges being faced.”

Last week, the Bank of England’s Monetary Policy Committee hiked interest rates for the first time since mid-2023, with policymakers warning another hike from the current four per cent was on the cards.

“The Bank of England’s rate rise was accompanied by a clear warning that policy may need to tighten further if higher energy costs feed through into wider prices. With inflation now projected to approach five per cent next year, mortgage rates are likely to remain elevated for longer, thereby continuing to weigh on the market, Parsons said.

Tom Bill, head of UK residential research at Knight Frank, said the latest slump in buying confidence “shows how decisions in Washington not Westminster are shaping the outlook for the UK housing market.”

“Rising mortgage rates have put downward pressure on sales volumes and prices this year due to the energy price shock caused by the Middle East conflict,” Bill said.

He added that there “is growing pressure on Donald Trump to find a diplomatic solution following the mid-term elections, which means borrowing costs have started edging lower over the last week, a trend that would only accelerate if a lasting ceasefire was agreed.”