Outlook stays muted as buyers and sellers hold back
The UK housing market showed little signs of recovery in September, with both buyer demand and sales agreements remaining subdued for the third consecutive month.
The Royal Institution of Chartered Surveyors (RICS), in its latest Residential Market Survey, indicated that the trend is expected to continue into early 2026.
The survey found that new buyer enquiries declined further, with a net balance of -19%, marking a third month of weakening interest. Agreed sales also remained negative at -16%, although this represented a slight improvement from the previous month’s figure of -24%.
House prices continued to face downward pressure, with a national net balance of -15%. The South East and East Anglia saw the most significant price falls, while Scotland and Northern Ireland continued to record modest increases.
The supply of new properties to the market also slowed, as new vendor instructions posted a -15% balance, the second monthly drop in a row.
Survey participants expressed little optimism for a near-term recovery in sales volumes, with both short-term and 12-month expectations at -9%. While short-term price expectations remain negative at -21%, a net balance of +12% of respondents anticipate prices will rise over the next year.
In the rental sector, tenant demand was broadly unchanged at -1%, but landlord instructions fell sharply to -38%, the lowest level since May 2020. RICS expects rents to rise by approximately 3% over the next year.
The rental market continues to be affected by a mismatch between supply and demand. Landlords are leaving the sector amid ongoing regulatory changes and rising costs, leading to expectations of steady rent increases through 2026 and further affordability challenges for tenants.
Concerns over the forthcoming November Budget were raised by surveyors, with many anticipating further property-related taxation. Respondents noted that affordability and market sentiment remain key constraints for both buyers and sellers.
“The housing market continues to struggle for momentum, with seemingly no clear catalyst on the horizon to spark a turnaround over the near-term,” commented Tarrant Parsons (pictured right), head of market research and analytics at RICS.
“Buyer demand remains subdued, while agreed sales are still on a downward trend, reflecting a broader hesitancy in the market. Ongoing uncertainty around potential measures in the upcoming Budget is also likely adding to the prevailing cautious sentiment.”
Jeremy Leaf, north London estate agent and a former RICS residential chairman, agreed that the prospect of higher – not just for property – taxes in the Budget is compromising confidence.
“Reduced buyer demand and declining sales activity remain symptoms of an uncertain market landscape,” added Emma Cox, managing director of real estate at Shawbrook. “Although interest rates are more stable, and there are signs of house prices cooling, buyers are not pushing ahead with deals.
“With the Autumn Budget approaching, it’s likely that first-time buyers in particular are holding off in the hope that some form of incentive will be introduced - especially in the wake of the removal of stamp duty exemption earlier this year.”
Leaf said that looking forward, there appears little likelihood of change at least until after the end of November. “However, in similar circumstances previously, we have often found the weaker the uncertainty, the stronger the recovery,” he pointed out.
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