Buyer demand and sales remain weak; sentiment positive for the year ahead
Housing market conditions remained subdued in May, with buyer demand and sales activity still in decline, according to the latest Royal Institution of Chartered Surveyors (RICS) Residential Market survey.
The report, however, also highlights tentative signs of stabilisation, with some indicators pointing to a potential turnaround in the months ahead.
New buyer enquiries continued to fall, with a net balance of -26% of respondents reporting a decline. This marks the fifth consecutive monthly drop, though the result is less negative than those recorded in March and April. Agreed sales remained weak, returning a net balance of -28%.
Short-term sales expectations appear to be levelling off, with the outlook for the next three months shifting from negative to broadly stable. Further out, sentiment is improving, with a net balance of +25% of survey participants anticipating higher sales volumes over the next year — the strongest reading since February.
House prices remain largely unchanged. The national net balance dipped slightly to -8% in May from -3% in April, suggesting continued flat conditions. Over the next 12 months, price expectations remain in positive territory, with 34% of surveyors expecting increases.
On the supply side, new listings rose for the eleventh straight month. A net balance of +7% reported more properties coming onto the market, while valuation activity picked up as well. Nineteen percent of respondents saw more appraisals than a year ago, indicating the potential for increased sales activity heading into summer.
In the lettings sector, tenant demand rose further in May, with a net balance of +22% — the highest since September 2024. In contrast, landlord instructions continued to fall, with -34% of respondents reporting a decline. As a result, rent expectations have climbed sharply, with a net balance of +43% forecasting further increases.
“Sentiment across the UK residential property market remains somewhat subdued, with ongoing uncertainty around global trade policies and the dampening effect of transactions being brought forward ahead of the stamp duty changes at the end of March continuing to weigh on buyer activity,” said RICS senior economist Tarrant Parsons (pictured left).
“However, near-term sales expectations are showing signs of stabilisation, suggesting that while muted conditions may persist in the short term, a further deterioration appears unlikely. Looking ahead, the outlook is more optimistic, with respondents anticipating a gradual recovery in sales activity over the next 12 months. That said, the pace and extent of any improvement will partly depend on the Bank of England’s ability to continue cutting interest rates.”
Meanwhile, RICS chief economist Simon Rubinsohn (pictured right), welcomed recent government announcements aimed at boosting housing supply, saying the commitment to a longer-term affordable housing settlement “should provide greater certainty and support more strategic delivery.”
“The creation of a new housing finance vehicle via Homes England is also a potentially important step in boosting supply, particularly if it improves access to funding for smaller developers,” Rubinsohn added. “Together, these measures could help address the UK’s chronic supply shortfall and support broader economic stability.
“Importantly, today’s announcements also build on the planning reforms announced earlier in the year, reported to be assessed as adding £6.8 billion to the economy. These new policies highlight the wider economic gains that could flow from an overall better functioning housing market.”
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