Housing market in the South East on 'life support'

The UK’s residential property market, previously buoyed by early signs of recovery, has entered a period of renewed uncertainty, with the latest data from the Royal Institution of Chartered Surveyors (RICS) and industry commentary painting a picture of regional divergence and subdued sentiment. 

July’s RICS Residential Market Survey reveals that both buyer demand and agreed sales have slipped back into negative territory, reversing the tentative optimism of previous months. The net balance for new buyer enquiries fell to -6% in July, down from +4% in June, while agreed sales dropped further to -16%, compared to -4% previously. Nationally, house prices continue to edge lower, with a net balance of -13% for price growth, a slight deterioration from the -7% recorded in the two months prior. 

Looking ahead, the market is expected to remain flat in the near term, with only a modest net balance of +1% of contributors anticipating an increase in sales volumes over the next three months. The outlook brightens slightly over a 12-month horizon, with a net balance of +8% expecting a pick-up in activity. 

Regional contrasts 

Beneath the national averages, the regional picture is far from uniform. The North West of England, Northern Ireland, and Scotland have emerged as relative bright spots. These regions have bucked the broader downward trend, with prices continuing to rise or, at worst, holding steady. In the North West, for example, surveyors report growth of 2-3%, supported by steady demand and a market less affected by the economic headwinds that have dampened sentiment elsewhere. 

Northern Ireland and Scotland also stand out, with respondents noting ongoing strength in both demand and pricing. In Northern Ireland, new builds and properties in turnkey condition are attracting particular interest, while Scotland’s market remains buoyant, especially for well-located and realistically priced homes. 

Concerns in the South and East 

By contrast, East Anglia, the South East, and the South West of England are experiencing more pronounced weakness. East Anglia, in particular, has seen price declines outpacing the national average, with surveyors citing a glut of flats and a high number of landlords exiting the sector.  

David Boyden, of Boydens Ltd, who is based in East Anglia, said: “Demand remains strong, deals coming through but not at the same rate due to holidays, time taken to reach exchange still remains ridiculously high and needs urgent attention by the government.” 

The South East is described as “on life support”, with high interest rates and taxation contributing to a stagnant market. Here, both buyer and vendor confidence are fragile, and the market is highly price sensitive, with overvaluing by agents leading to limited viewings and extended selling times. The concern from brokers is clear. 

Christopher Clark, from Ely Langley Greig, said: “The market is presently on life support. Potential buyers are awaiting the outcome of the Autumn budget before they decide what to do.”  Jack R O’Brien, of Opecprime Development Limited, added: “A very weak market with government intervention required.” 

The South West, too, is characterised by sluggish activity and downward price adjustments, with agents reporting that only the most competitively priced properties are attracting interest. The second home market in this region has been especially hard hit, and the outlook remains subdued as the market waits for a catalyst to revive buyer sentiment. 

London: A market in flux 

London presents a mixed picture. While some agents report that sales agreed are increasing as buyers and sellers’ expectations converge, the capital remains highly price sensitive. High transactional taxes and the flight of wealthy individuals to more favourable tax environments have weighed on demand, particularly in central areas. The summer holiday period has also contributed to a slowdown in enquiries and viewings, and the market awaits further clarity on interest rates and government policy. 

Regional snapshot 

North West 

• Strength: Prices rising, demand steady; market activity remains resilient, especially for lower-priced properties. 
• Outlook: Confidence returning, with growth of 2–3% reported. 

Northern Ireland 

• Strength: Prices continue to rise; strong demand, particularly for new builds and turnkey homes. 
• Outlook: Listings expected to increase as vendors return from holidays. 

Scotland 

• Strength: Prices rising or holding firm; busy summer market, especially for well-located homes. 
• Outlook: Market buoyant, though some agents note longer completion times. 

Yorkshire & the Humber 

• Mixed: Market active but highly price sensitive; lower and mid-market more buoyant than higher end. 
• Outlook: Buyers’ market; confidence has dipped, especially in buy-to-let. 

North 

• Mixed: Strong demand for coastal resorts and lower-priced properties; higher-end sales slower, more price reductions needed. 
• Outlook: Economic uncertainty clouds longer-term prospects. 

East Midlands 

• Weakness: Price adjustments required to secure sales; confidence uncertain, market described as “price sensitive.” 
• Outlook: Further interest rate cuts needed to sustain momentum. 

West Midlands 

• Mixed: Stable market with good sales in some areas, but cost of living and affordability concerns weigh on outlook. 
• Outlook: Lower end more active; over-priced rural properties struggling. 

East Anglia 

• Weakness: Price declines outpace national average; oversupply of flats, many landlords exiting market. 
• Outlook: Buyer confidence low, market described as quiet. 

South East 

• Weakness: Market “on life support”; high interest rates and taxes stifle activity, buyer and vendor confidence fragile. 
• Outlook: Highly price sensitive, overvaluing by agents common, slow sales. 

South West 

• Weakness: Sluggish activity, downward price adjustments; second home market particularly slow. 
• Outlook: Caution prevails, with further price cuts likely needed to stimulate sales. 

London 

• Mixed: Market remains price sensitive; some increase in agreed sales as expectations align, but high taxes and departures of wealthy buyers weigh on demand. 
• Outlook: Central areas especially subdued; market awaits clarity on rates and policy. 

Source: RICS UK Residential Market Survey, July 2025