The worst of the housing market slowdown in activity may be starting to pass, according to surveyors, but there are also signs of some sellers being more hesitant to come to market.
The Royal Institution of Chartered Surveyors (Rics) said members expressed ongoing concerns about the impact of inflation, the cost of living, domestic political uncertainty and global conflicts in its June survey.
Key Indicators Improve Slightly
The volume of new buyer inquiries was the least negative since February. A net balance of 29% of property professionals reported new buyer inquiries falling rather than rising, and while this was still a negative reading it was an improvement compared with a net balance of 34% of professionals who reported falling buyer inquiries in the previous two months.
The volume of newly-agreed sales was also slightly less subdued, with a net balance of 32% of property professionals reporting a decrease, compared with 35% previously. Looking ahead to the next 12 months, a net balance of 1% of property professionals expect to see sales increase.
Supply Tightens
The supply of homes coming onto the market also appears to be tightening, with a net balance of 23% of professionals seeing new instructions to sell fall. Rics said this is the weakest reading in more than a year. Market appraisals also declined, suggesting the pipeline of homes coming to market may remain constrained in the months ahead, the report said.
A net balance of 33% of property professionals reported seeing house prices fall, edging down slightly compared with 34% seeing this in May and 35% reporting this in April. The South East and South West of England continue to report more negative price trends than the UK average, while Northern Ireland and Scotland remain more positive, Rics said.
Outlook and Expert Comments
Over the next 12 months, the outlook is modestly positive, with a net balance of 8% of property professionals expecting prices to rise, up from 6% previously. In the lettings market, tenant demand picked up, with a net balance of 18% of professionals seeing an increase in demand – the strongest reading since May 2025. Landlord instructions remained negative, with a balance of 18% of professionals seeing a fall, pointing to continued supply constraints. Rents are expected to continue rising, with projected rental growth over the next 12 months standing at around 2.5%, Rics said.
Rics head of market research and analysis, Tarrant Parsons, said: “June’s survey results offer some cautious encouragement that the worst of the slowdown in market activity may be beginning to pass, with several key indicators moving in a less negative direction for a second consecutive month. That said, any nascent improvement remains fragile and is now being tested by renewed political uncertainty on the domestic front. While the Bank of England left interest rates unchanged, uncertainty around the outlook for inflation and borrowing costs continues to weigh on sentiment, even if the recent decline in oil prices is a welcome development. Until there is greater clarity over both the political backdrop and the path of interest rates, housing market activity is likely to remain relatively subdued in the near term.”
Rachel Springall, a finance expert at Moneyfactscompare.co.uk, said: “The imbalance between supply and demand in the rental sector will need to ease to make any significant difference to prospective tenants. Until then, renters may see a continuation of rising rents and fierce competition for available rental properties.”
