The housing market saw an increase in buyer enquiries during January, the latest RICS UK Residential Survey has indicated.

RICS reported a net balance of +16% of respondents citing an increase in enquiries during the first month of the year. However, it noted that that his feedback was largely gathered prior to the Bank of England’s decision to increase the base interest rate to 0.5%.

Nevertheless, this figure was up from a reading of +9% in December and represented the strongest figure since May 2021.

At the same time, the survey’s indicator that captures new instructions remained in negative territory, at -8%, although RICS noted that the latest net balance is the least negative since April last year.

In terms of the 12-month outlook, RICS also found that a headline net balance of +24% of survey participants envisage sales volume rising over the year to come, which is an increase on a reading of +16% last time.

Commenting on the survey’s findings, interactive investor senior personal finance analyst, Myron Jobson, said: “Demand for property far outstripping supply is now an all too familiar story in this property market and continues to push prices higher. Property values are hitting the ceiling of what many buyers can afford to pay.

“It will be interesting to see how the recent rise in the interest rate and the added pressures of the cost of living squeeze on household budgets will affect consumer confidence in the short term.

“Borrowing costs are still low by historical standards, but the bumper cost of homeownership is likely to exert a cooling effect on the housing market which has come off the boil since the end of the stamp duty holiday.”

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