Buyer demand and agreed sales dip sharply in March
The UK residential property market softened in March as the rush to complete transactions before the April 1 Stamp Duty deadline faded, according to the Royal Institution of Chartered Surveyors’ (RICS).
Results of the RICS Residential Market Survey pointed to a slowdown in market activity, with a net balance of -32% of respondents reporting a drop in new buyer interest. That figure marked a steep decline from -16% in February and the weakest level of demand sentiment since September 2023.
Agreed sales also slipped, with a net balance of -16%, compared to -13% the month before. Survey participants expressed a more cautious view for the next three months, although expectations over a 12-month period remain modestly optimistic, with a net balance of +11% forecasting higher sales volumes.
Price growth stalls as regional divergence emerges
The survey’s headline indicator for house price sentiment came in at a net balance of +2% in March. That represented a noticeable slowdown from +20% in January and +11% in February, suggesting price growth has levelled off. While most UK regions saw muted activity, Scotland and Northern Ireland appeared more resilient to downward price pressures.
“The expiry of the Stamp Duty break was always going to lead to a pause in activity in the sales market,” said RICS chief economist Simon Rubinsohn (pictured left). “However, the latest results, and indeed the anecdotal remarks from respondents to the survey, suggest that the shift in sentiment has been aggravated by the slew of negative macro newsflow over the past few weeks.
“Looking forward, 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. 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.”
Tomer Aboody (pictured centre), director at property lender MT Finance, agreed that the slowdown seen in the market correlates with the Stamp Duty changes, alongside further negative feelings within the macro and UK economic climate.
“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.”
Rental demand climbs amid shrinking landlord supply
In the lettings sector, tenant demand rose for the first time since October 2024, with a net balance of +20% of contributors reporting higher interest. However, the supply side continued to tighten, with landlord instructions falling by a net balance of -24%.
As a result, +31% of respondents expect rental prices to rise over the coming three months, reflecting growing pressure from the ongoing mismatch between supply and demand.
“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.”
Want to be regularly updated with mortgage news and features? Get exclusive interviews, breaking news, and industry events in your inbox – subscribe to our FREE daily newsletter. You can also follow us on Facebook, X (formerly Twitter), and LinkedIn.
