The UK housing market remains weak but shows early signs of recovery, with several indicators improving for a second consecutive month, according to RICS.
The Royal Institution of Chartered Surveyors’ UK Residential Market Survey for June found new buyer enquiries posted a net balance of -29%, an improvement on the -34% recorded in the previous two months and the least negative reading since February. Newly agreed sales also remained subdued at -32%, against -35% previously.
Near-term sales expectations improved to -16%, up from a low of -34% in March. Over the next twelve months, respondents expect sales volumes to remain broadly flat, with a net balance of +1%.
Supply conditions have tightened. New instructions to list properties for sale fell to -23% from -10%, the weakest reading in over a year, while market appraisals also declined – suggesting the pipeline of homes coming to market could remain constrained in the months ahead.
House prices continue to face downward pressure nationally, with the headline price balance at -33%, broadly unchanged from -34% in May and -35% in April. The South East and South West of England reported more negative price trends than the UK average, while Northern Ireland and Scotland remained more positive.
Near-term price expectations, though still negative, improved to -32% from -44%. Looking ahead twelve months, the outlook is modestly positive, with a net balance of +8% of respondents expecting prices to rise, up from +6% previously.
In the lettings market, tenant demand picked up, with the headline net balance rising to +18% – the strongest reading since May 2025. Landlord instructions remained negative at -18%, pointing to continued supply constraints. Rental growth over the next twelve months is projected at around 2.5%.
RICS members cited inflation, the cost of living, domestic political uncertainty and global conflicts as ongoing concerns, with some noting hopes that the end of the Iran war could boost market conditions.
Dan Stocks, a surveyor in Guildford, said: “Market uncertainty remains due to Labour leadership changes, cost-of-living pressures, fuel prices, the ongoing Russia-Ukraine war and the recent conflict involving Iran, all of which continue to weaken confidence.”
Paul Mcskimmings of Edward Watson Associates in Newcastle-upon-Tyne struck a more optimistic note: “Despite difficulties with world conflicts and political instability at home, instructions have remained constantly high. It will be interesting to see what happens to the market following a change of prime minister.”
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.”
Image credit: Pixabay
Read next: Former Fife Council HQ begins new life as homes
Are you a social housing professional? Sign up for a FREE MEMBERSHIP to upload news stories, post job vacancies, and connect with colleagues on our secure social feed.
