Home buyer demand across the UK has weakened for the third consecutive month, with property sales also showing signs of softness, according to the latest survey by the Royal Institution of Chartered Surveyors (RICS). In September, a net balance of 19% of property professionals reported a decline in new buyer inquiries, marking continued caution among buyers amid an uncertain market environment. Agreed sales have similarly cooled, with 16% of respondents noticing a fall in transactions, a slight improvement from August’s 24% net decline but still indicative of subdued activity. This cautious sentiment is attributed largely to apprehension ahead of the forthcoming November Budget, with affordability concerns and overall market sentiment dampening both buyer and seller enthusiasm.

In parallel, house prices remain under downward pressure. RICS data points to a net balance of 15% of surveyors seeing a drop in prices, especially notable in the south east of England and East Anglia. Contrastingly, regions such as Scotland and Northern Ireland are continuing to experience modest price growth. Despite the current negative outlook for prices in the near term, surveyors remain cautiously optimistic, expecting house prices to edge higher over the next 12 months. This forecast aligns with broader market trends signalling a tentative recovery longer term, even as immediate demand slackens.

Supporting this perspective, Zoopla’s recent research highlighted regional disparities in first-time buyer home prices over the past year, showing a 2.4% average increase nationally but with considerable variation. The north east of England experienced the most significant annual rise at 10.2%, while London saw a decline of 2.4%, despite the capital’s average first-time buyer price standing at £420,600. Richard Donnell, executive director at Zoopla, commented on these dynamics, noting that affordability challenges—particularly in southern England—continue to inhibit widespread price growth and shape buyer preferences, with many opting for smaller properties such as flats in London.

The rental sector exhibits a different but related pattern of change. Tenant demand remains broadly flat, with only a marginal 1% net decline reported by property professionals. However, landlord activity has dropped sharply, with 38% of respondents citing a fall in landlord instructions. This reduction in rental supply is contributing to rising rental prices, which are projected to increase by around 3% over the coming year. Sarah Coles, head of personal finance at Hargreaves Lansdown, highlighted the pressures facing renters: “As landlord numbers continue their relentless slide, competition intensifies for available properties, pushing rents higher and creating uncertainty for tenants facing displacement.” This trend reflects wider concerns about housing stability and affordability for renters across the UK.

Amid these market trends, the UK government has announced reforms aimed at improving the home-buying process to alleviate some of the market’s current frustrations. The proposed changes include mandating more comprehensive upfront information from sellers and estate agents when homes are listed, intended to reduce delays caused by searches and surveys. Additionally, earlier binding contracts could be introduced to lower the risk of sales chains collapsing—a frequent cause of transaction failures. These measures aim to cut the average time taken to complete property transactions, which presently averages five months, potentially speeding up moves and reducing costs for buyers. According to government projections, first-time buyers stand to save an average of around £710. The Royal Institution of Chartered Surveyors has expressed support for these plans, citing inefficiencies and high current costs in the system as key concerns to address.

Despite these efforts and some regions’ resilience, overall market activity remains subdued, reflecting broader economic uncertainty, including concerns about potential tax increases and borrowing costs. Halifax recently reported a modest 1.3% annual increase in house prices to September 2025, the slowest rise since April, with a slight month-on-month price decline. This contrasts with the more robust growth rates experienced in the second half of 2024, emphasizing the current softness in housing market momentum. Finance Minister Rachel Reeves is expected to announce further fiscal measures in the upcoming budget, which could influence buyer sentiment and market dynamics in the weeks ahead.

Meanwhile, the construction sector, closely linked to housing supply, continues to face challenges. Official PMI data indicates that construction activity contracted for the ninth consecutive month, as uncertainty around the November Budget impacts investment decisions. The sector’s subdued outlook adds further complexity to the housing market, reinforcing the interplay between economic policy, supply constraints, and market sentiment that shapes both demand and pricing trends.

In summary, the UK housing market is experiencing a period of cautious flatness, marked by declining buyer demand and sales, along with regional price variations and tightening rental supply. Government reforms seek to streamline transactions and reduce buyer costs, potentially providing some relief in a challenging environment fraught with economic uncertainties. Market watchers will be closely monitoring the impact of the upcoming budget and how it might influence housing market recovery or further consolidation.

📌 Reference Map:

Source: Noah Wire Services