Housing market shows fresh weakness

The RICS survey shows momentum fading in the UK housing market as buyer demand and sales slip while policy signals loom.

RICS finds housing market faltering after stamp duty recovery

July results from the Royal Institution of Chartered Surveyors show the housing market losing momentum. New buyer inquiries posted a net balance of -6% in July, down from +4% in June, with weaker demand reported in East Anglia, the South East and the South West. Agreed sales fell to a net balance of -16%, down from -4% in June, and respondents expect a flat near term outlook with a net balance of +1% compared with +7% previously. New listings rose slightly, with +9% of respondents reporting more properties on the market. National prices turned lower with a net balance of -13%, though gains persist in Northern Ireland, Scotland and the North West, while East Anglia saw some of the steepest price falls.

Renting remains tight on the ground: tenant demand held steady at +4% in the three months to July, while landlord instructions continued to weaken, with a net balance of -31%, the weakest since April 2020. With supply constrained, rents are expected to rise further, with a net balance of +25% anticipating higher rents over the next three months. Analysts note price sensitivity remains high, and buyers are awaiting clearer policy direction from the Autumn Budget and further rate moves.

The figures show more than a seasonal lull. They reflect how policy and affordability shape decisions, with buyers weighing lower prices against the risks of future tax rules and rate moves. The prospect of stamp duty reforms and a contested rate path creates reluctance to commit, even as some regions show pockets of resilience. The lettings data underscores a broader supply gap that translates into higher rents and tighter conditions for tenants.

Looking ahead, policy clarity could unlock movement. A credible plan on stamp duty and a balanced approach to rate cuts could restore confidence without inflating prices. In the meantime, landlords, buyers and renters will keep calibrating expectations as the market absorbs tighter supply and uneven regional trends, with the risk of a longer plateau if policy signals stay murky.

Highlights

Policy signals and price reality will shape the next phase of the housing market.