The UK housing market is showing “further signs of strain” according to the latest Royal Institution of Chartered Surveyors market snapshot.
RICS says April saw another drop in buyer enquiries and agreed sales, with ongoing economic uncertainty continuing to weigh on confidence.
New buyer interest declined for the third consecutive month, reporting a net balance of -33% indicating a fall in enquiries. This reflects growing caution from prospective buyers alongside affordability pressures and tight borrowing conditions.
Sales activity also continued to soften. A net balance of –31% of survey participants reported a decline in agreed sales over the month, the weakest figure recorded since mid-2023 (-42% August 2023), pointing to a subdued spring market.
RICS Chief Economist Simon Rubinsohn says: “Although geopolitical developments haven’t helped the mood music in the residential market over the past month, the main reason for the dip in the key RICS sales activity metrics lies in the expiry of the stamp duty holiday at the end of March. Near term expectations indicators suggest the subdued trend will persist for the next few months at least but looking beyond this, the results are more encouraging reflecting in part the prospect of deeper interest rate cuts than previously anticipated.
“More problematic, however, is the negative feedback in the survey around supply in the rental market. With demand continuing to grow, there appears little relief in store for tenants in terms of the upward pressure on rents. Critically, even with the rise in the build to rent to sector the shortall of affordable rental stock looks set to remain substantial”.
RICS says that short-term sentiment expectations remain modest, with a net balance of –15% anticipating a further dip in sales over the next three months. Despite this, there are signs of improvement on the horizon. A net balance of +17% of respondents expects sales to rise over the year ahead, up from +11% in March, suggesting that longer-term sentiment remains more positive.
House prices held steady in April, slipping slightly into negative territory at –3% from +2% previously. While short-term price expectations remain cautious, with a net balance of –21% of respondents anticipating some downward pressure over the next three months, the longer-term view is more resilient. A net balance of +39% of survey participants expect prices to return to growth over the year ahead.
On the supply side, new instructions to sell remained flat, posting a net balance of +6% for the second month in a row. Similarly, the flow of property appraisals only rose marginally suggesting no meaningful change in supply conditions in the near term.
In the lettings market, tenant demand increased in the three months to April according to a net balance of +14% of respondents. This represents a slightly stronger demand trend compared to the mostly flat picture seen in the previous quarter (net balance was +3% in the three months to January).
Alongside this, the decline in new landlord instructions remains evident, with the latest net balance of –26% moving deeper into negative territory from –19%. Looking ahead, the near-term rent expectations net balance of +25% suggests further rental price rises over the next three months.
The RICS survey is based on responses from surveyors and the institution says many respondents commented on the initial impact of the Trump tariff announcements reducing confidence; however, some are pleased with the general level of resilience the market is displaying in an uncertain global climate.
This article is taken from Landlord Today