Home buyer demand was subdued in September, as higher interest rate expectations weighed on the UK housing market, according to surveyors.
A net balance of 22% of property professionals saw new buyer inquiries falling rather than rising, the Royal Institution of Chartered Surveyors (Rics) said.
This was a more negative result than August when a net balance of 18% of professionals saw buyer inquiries fall, and the first month since March where the indicator weakened.
Sales and supply
But this is still more positive than six months earlier, when a net balance of 41% of property professionals saw buyer inquiries fall.
Agreed sales also slipped back in September, with a net balance of 18% of professionals seeing a fall, deteriorating from 16% previously.
A net balance of 6% of professionals in the report expect sales to fall in the next three months.
The supply of fresh homes coming on the market recorded its first positive reading since mid-2025, with a net balance of 6% of professionals seeing an increase in new instructions from home sellers.
Price pressures
But market appraisal activity remains below levels seen a year earlier, the report indicated.
House prices also continued to face downward pressure in September, with a net balance of 32% of property professionals seeing falls, increasing from 28% in August.
Most parts of England reported more negative price balances in September, with London notably weaker than the national result, Rics said.
By contrast, prices continued to rise in Northern Ireland, while Scotland recorded modest price growth, the report said.
A net balance of 24% of professionals expect house prices to fall rather than increase in the next three months, but looking at price expectations over the next 12 months the net balance was zero – indicating that house prices are expected to be broadly unchanged in a year’s time.
Market outlook
In the lettings market, tenant demand continued to rise while landlord supply remained constrained.
Rics head of market research and analysis Tarrant Parsons said: “A renewed rise in interest rate expectations has created a fresh headwind for the housing market, with buyers becoming a little more cautious and sales activity losing some momentum this month.
“Even so, the latest results do not point to any significant shift in direction.
“Rather, they suggest the market may need to contend with a somewhat longer period of subdued activity as households adjust to the prospect of borrowing costs remaining higher than previously anticipated.”
Rachel Springall, a finance expert at Moneyfactscompare.co.uk, said: “Higher mortgage rates and the rising cost of living are creating a painful affordability squeeze for new buyers.
“However, there is no denying that those who can afford to buy have more bargaining power when demand remains weak and house prices are under pressure.
“First-time buyers with a sizeable deposit might be able to find a more affordable home due to flatlining house prices, but higher mortgage rates risk undermining that affordability boost.”
