January house prices saw an increase at the slowest pace seen in the last two years across England and Wales. The increase is not expected to be the norm as many surveyors are forecasting further slowdown in the housing market. According to the Royal Institution of Chartered Surveyors (RICS), only 2% of the surveyors and estate agents expect an increase over the first quarter.

There has been a decrease in demand for property despite lenders offering very competitive low interest rates on mortgages. Some call it a natural softening of the market as buyers walk away from the higher prices.

Those polled revealed that potential buyers inquiring about property declined for the seventh consecutive month in the UK. Buyer interest in Scotland was more plentiful, yet Northern Ireland registered the strongest rising prices for the fifth consecutive month.

Recent stamp duty reform, the new land and buildings transaction tax (LBTT), is expected to bring back first time buyers to the market. Yet it could lower the demand on higher priced properties.

Simon Rubinsohn, chief economist at RICS, “The changes to stamp duty and introduction of LBTT in Scotland are, to varying degrees, providing an incentive to first-time buyers, but there remain a number of challenges to market, such as affordability constraints, lack of stock and caution in the run-up to the general election.

“Overall, while the RICS lead indicators suggest the level of housebuilding looks set to increase over the course of 2015, the volume of home starts will still fall considerably short of the number of new households being formed, let alone make a dent in the historic shortfall of housing across all tenures.”

Mortgage and remortgage lending demand still remains low putting lenders in a competitive environment. This offers borrowers the opportunity to find an attractive deal. Those seeking professional assistance should consider a broker as they could assist the now more complicated process of gaining an approval.