2014.09.1102:17:27UTC+00UK housing market stabilizes

Housing markets across the UK are starting to cool down led by stabilizing prices in the capital of London.

Data from the Royal Institute of Chartered Surveyors (RICS) show that the number of inquiries from new buyers decreased for the second consecutive month in August alongside the first ever drop in the number of agreed upon sales in two years. According to the results of their survey, the net balance of respondents expecting a rise in prices fell from the 51% at the start of 2014 to only 9% last month.

The RICS' statistics is considered a forward looking market indicator due to its ability to capture surveyors' experience on the front lines of the buying market. The group claims that the figures indicate the coming of a "less volatile market" especially in the booming city of London where property prices have increased at almost double the rate as other other regions in the UK over the past year. New buyer interest in the capital declined again during August.

Meanwhile, properties outside the capital have started to strengthen which may be due to the UK recovery just starting to be felt in regions where affordability is less stretched. RICS members now expect prices outside London to grow faster than those inside it.

Chief economist for RICS, Simon Rubinsohn, attributed part of the market cooldown to concerns over interest rates being raised up in the near future. Other contributors included the implementation of stricter affordability checks required by new mortgage regulations which has slowed down the transaction process by a month on average.

Halifax data released earlier this week showed that house prices in the UK slowed down from the 10.2% in July to 9.7% in August compared to the same period in 2013. Approved mortgages likewise fell in July after increasing in June, based on data from the Bank of England.