LONDON – The housing market in England and Wales is showing signs of strain, with the burden falling heaviest on working families already struggling with affordability. A recent survey by the Royal Institution of Chartered Surveyors (RICS) reveals a concerning trend: decreased inquiries from new buyers driven by fears of rising mortgage rates and escalating inflation linked to the ongoing conflict in the Middle East.

This situation highlights the vulnerability of the housing market to external shocks and underscores the systemic inequalities that leave lower-income households particularly exposed. As potential buyers become more cautious, deterred by the prospect of higher borrowing costs and the rising cost of living, the dream of homeownership slips further out of reach for many.

The Bank of England's warning of unavoidable inflation, directly attributed to the war in the Middle East and the resulting surge in oil and gas prices, paints a bleak picture for household budgets. The likely increase in interest rates will further squeeze already stretched finances, making it harder for first-time buyers to enter the market and for existing homeowners to manage their mortgage payments.

The RICS report emphasizes the disproportionate impact on southern England and London, where affordability pressures are already acute. This regional disparity underscores the need for targeted interventions to address the housing crisis in areas where it is most severe. Policymakers must prioritize measures to increase the supply of affordable housing and provide financial support to those struggling to keep up with rising costs.

The decrease in new buyer inquiries, coupled with a decline in agreed sales, signals a slowdown in market activity. This slowdown is not merely an economic trend; it represents a human cost. Families face uncertainty, delayed plans, and the prospect of being priced out of the market altogether.

The rental market offers little respite, with demand outpacing supply as landlords exit the sector due to increasing regulation and higher taxes. This creates a perfect storm of rising rents and limited availability, further exacerbating the housing crisis for low-income renters.

The findings from Savills, highlighting increased caution among buyers and sellers since the onset of the Middle East conflict, reinforce the urgent need for government action to stabilize the housing market and protect vulnerable households. This includes investing in social housing, strengthening tenant protections, and implementing policies to curb speculation and ensure that housing serves as a basic human right, not merely a commodity.