Buyer demand and prices dip amid fears of its impact
The UK housing market has slowed due to mounting global trade tensions, with industry experts warning that the slowdown in activity seen in March could deepen if US President Donald Trump’s tariff moves further unsettle economic conditions.
According to the Royal Institution of Chartered Surveyors (RICS), buyer demand dropped to its lowest level since September 2023, with its index of enquiries falling sharply. At the same time, house price growth all but stalled, with the RICS price balance slipping nine percentage points to +2 in March — the weakest since August and below economists’ expectations.
While RICS said longer-term sentiment remains modestly positive, chief economist Simon Rubinsohn (pictured left) warned that escalating global trade tensions could derail the fragile recovery.
“The impact on the market will in no small part depend on how the economy is affected by the emerging trade war and the response of the Bank of England to the shifting environment,” Rubinsohn said. “For now, it is noteworthy that the longer-term RICS expectations metrics are still relatively resilient, but they have the potential to be blown off course if the tariff headwinds intensify.”
Results of the RICS Residential Market Survey, conducted between March 20 and April 4, captured early market reactions to Trump’s tariff announcement on April 2.
March also marked a notable shift in UK housing activity following the end of the temporary Stamp Duty relief on April 1. RICS reported a net balance of -32% of survey participants seeing fewer new buyer enquiries, compared to -16% in February. This decline coincides with the rush to complete transactions before the tax deadline coming to a close.
Tomer Aboody (pictured centre), director at property lender MT Finance, noted that the end of the Stamp Duty break and broader economic uncertainty have both played a role in the slowdown.
“Hitting the UK with higher taxes, higher Stamp Duty, along with businesses taking further hits from the October budget, has provided so much uncertainty and this slowdown,” Aboody said. “Let’s hope there are some positive changes to come.”
Agreed sales also dipped, with a net balance of -16% reporting a fall, while short-term sentiment weakened. However, there was still a degree of optimism over the longer term, with +11% expecting higher sales volumes in 12 months’ time.
While overall house price momentum slowed, Scotland and Northern Ireland were more resilient to downward price pressures, the RICS report showed.
Rental demand climbs amid shrinking landlord supply
In the rental sector, tenant demand increased for the first time since October 2024. A net balance of +20% of respondents reported higher interest, even as landlord instructions continued to fall, with a net balance of -24%. The imbalance is expected to fuel further rental price rises, with +31% of survey participants anticipating growth in the next three months.
“With lettings, we have found demand has been supported over the past few weeks at least by aspiring first-time buyers who were unable to profit from the Stamp Duty concession before it disappeared, who are now looking to re-let,” said Jeremy Leaf (pictured right), a north London estate agent and former RICS residential chairman.
“However, the continuing lack of stock and slow increase in the number of landlords wanting to sell has exacerbated the supply-demand imbalance and is keeping rents up despite affordability concerns.”
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