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Britain’s housing market continued to face pressure in the past month, with buyer demand, sales activity and house prices remaining subdued, according to a survey by the Royal Institution of Chartered Surveyors (RICS). While there were early signs that buyer interest may be stabilising, concerns over potential interest rate increases continue to weigh on market sentiment. The rental sector also showed signs of strain, as landlords reduced the number of properties available for rent following the introduction of new tenant protection measures. At the same time, tenant demand strengthened, adding further pressure to rental prices.
Britain’s housing market remained under pressure in the past month, although there were indications that buyer interest may be showing signs of stabilisation, according to the latest survey released by the Royal Institution of Chartered Surveyors (RICS).
The survey found that housing demand continued to remain weak, with the measure tracking new buyer enquiries staying at minus 34 per cent. While the reading remained negative, it marked the first time since January that buyer enquiries did not deteriorate further.
Sales activity also remained subdued. The index measuring agreed sales stood at minus 37 per cent, unchanged from the previous month, highlighting continued weakness in transaction volumes across the market.
House prices continued to face downward pressure. RICS reported that its house price measure remained at minus 35 per cent for the second consecutive month, representing the broadest decline in house prices since November 2023. The findings suggest that affordability concerns and economic uncertainty continue to affect purchasing decisions.
Market participants are also closely monitoring monetary policy developments. The Bank of England is assessing the longer-term inflation risks linked to the ongoing conflict involving Iran, and expectations of potential interest rate increases have added to caution among buyers and sellers.
Despite current challenges, the survey pointed to a modest improvement in expectations for future activity. Near-term sales expectations improved to minus 25 per cent after remaining below minus 30 per cent in the previous two months. Looking further ahead, respondents expected sales activity to improve over the next 12 months, with the sales expectations measure returning to positive territory at 2 per cent. Price expectations over the same period showed a similar trend.
The rental market presented a mixed picture. Demand from tenants increased during the month, while the number of rental properties being offered by landlords declined. Landlord instructions fell to minus 28 per cent, the weakest reading since December last year.
The reduction in available rental stock comes after new tenant protection measures were introduced, a move that has prompted some landlords to reassess their participation in the rental market. Similar concerns have been raised by landlord groups in recent years, who have cited regulatory changes, higher borrowing costs and increased operating expenses as factors affecting investment decisions.
With supply tightening and tenant demand strengthening, expectations for rent growth continued to rise. RICS reported that rent expectations increased to 36 per cent, the highest level recorded since May 2025, signalling further pressure on rental costs in the months ahead.
Tarrant Parsons, Head of Market Research and Analysis at RICS, said that the possibility of higher interest rates was likely to keep sentiment across the housing market fragile in the near term.
Source Reuters
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