Rics: Cooling in housing market predicted

Demand for property is expected to fall off as the impact of interest rate hikes begins to effect borrowing costs, Rics has said.

Commenting on the publication of the Bank of England’s (BoE’s) mortgage approval data for June, Rics chief economist Simon Rubinsohn believes the latest figures indicate a "modest drop in the level of re-mortgage activity".

Total net lending for June was £10.4 billion, according to the BoE, with lending secured on properties at £9.6 million and the total number of loans approved for house purchasing unchanged from May, at 114,000.

However, the number of loans approved for both re-mortgaging and other purposes, at 102,000 and 72,000 were lower than the previous month’s totals of 110,000 and 74,000 respectively.

Although the number of mortgage approvals was higher than expected, the drop in remortgaging activity is significant, Mr Rubinsohn said.

"Homeowners may just be becoming a little more wary of continuing to draw on the equity that has built up in their property as a means of financing spending at a time when real incomes growth remains under pressure."