Buyer demand turns positive for the first time in six months, but sales volumes remain subdued
The UK housing market is showing early signs of stabilisation, according to the latest RICS Residential Market Survey, with the data pointing to modest improvements in buyer interest and sales activity, though overall momentum remains subdued.
For the first time since December 2024, new buyer demand moved into positive territory, with a net balance of +3% in June. This marks a rebound from May’s -22%, indicating a slight shift in sentiment rather than a full recovery.
Agreed sales also saw a notable improvement. The national net balance rose to -3%, following -25% in May and -28% in April. While still negative, the figures suggest a slowing decline in transaction volumes.
Short-term expectations turned slightly positive, with a net balance of +6% in June, reversing the -2% reading a month earlier. Longer-term projections remain cautious, with respondents forecasting relatively flat sales over the next 12 months, with a net balance of +5%.
The number of new property listings dipped slightly, according to the RICS report, with a net balance of +3% in June, down from +7% in May. However, 16% of respondents said market appraisals were higher than the same time last year, pointing to stable supply.
House prices remained under mild downward pressure, with a net balance of -7% nationally.
Regional trends varied, with declines in the South East, East Anglia, and London. In contrast, markets in Northern Ireland, the North West, Scotland, and the East Midlands reported growth.
Looking ahead, 24% of survey participants expect house prices to rise over the next year, despite the current softening.
“The UK residential market appears to be entering a more settled phase, with demand showing signs of stabilising following a period of volatility,” said Tarrant Parsons, head of market research and analysis at the Royal Institution of Chartered Surveyors. “The earlier distortion caused by transactions being brought forward ahead of the Stamp Duty changes now appears to have largely dissipated, allowing underlying trends to re-emerge.
“Encouragingly, near-term sales expectations have begun to edge higher, pointing to a modest shift in sentiment. That said, confidence in the market remains somewhat delicate, with economic uncertainty at both the domestic and global level still seen as a potential headwind.”
For Jeremy Leaf, a north London estate agent and former RICS residential chairman, the market “feels a bit like one step forward, one-and-a-half steps back.”
“Although doing its best to recover activity levels prevailing earlier in the year, there’s little sign of a significant pick up yet,” he said. “In our offices, demand has improved, particularly for houses rather than flats, and most sales agreed are staying that way despite some price renegotiation.
“However, the amount of property available and worries about the economy – regardless of the prospect of further interest rate cuts later in the year – are proving more relevant for many.”
In the rental sector, conditions remained largely unchanged. Tenant demand held flat, with a net balance of -2%, while landlord instructions dropped further, down to -21%. Rent expectations eased, with 24% of respondents predicting increases over the next three months — down from 43% in May.
“Nervousness about the cost of living again and seemingly inevitable autumn tax rises are contributing to present tenant affordability concerns,” Leaf said. “On the ground, we are finding there’s still interest, particularly in smaller one- and two-bedroom flats.
“Rents are being supported by a continuing lack of stock due to landlords selling up and not being replaced in anything like sufficient numbers by new or existing investors.”
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