Global Market | UK housing market downturn eases slightly, but sentiment remains fragile: RICS

Britain's housing market showed tentative signs of stabilisation in June, although uncertainty over inflation, borrowing costs and the broader political environment continued to weigh on buyer confidence, according to a survey released by the Royal Institution of Chartered Surveyors (RICS) on Thursday.

According to the Reuters report, the RICS headline house price balance stood at -33% in June, broadly unchanged from May's revised reading of -34%, indicating that more surveyors continued to report falling house prices than rising ones, though the pace of decline eased marginally.

The survey suggested that demand from prospective homebuyers improved modestly. The measure of new buyer enquiries rose to -29% from -34% in each of the previous two months, marking its least negative reading since February and hinting at a gradual return of market interest.


Expectations for near-term home sales also improved. The balance measuring sales expectations over the next three months recovered to -16%, significantly better than March's low of -34%. Looking further ahead, respondents were broadly neutral on sales over the next 12 months, with the indicator edging into positive territory at +1%.

House price expectations over the coming year also strengthened slightly, rising to +8% from +6%, suggesting surveyors expect modest price gains despite current market weakness.

The survey indicated that the rental market remained considerably tighter than the sales market. Tenant demand strengthened to +18%, its highest level since May 2025, while the supply of rental properties remained constrained as landlord instructions stayed negative at -18%. Survey participants expect rents to rise by around 2.5% over the next year as demand continues to outpace available housing stock.

According to Reuters, RICS said uncertainty surrounding inflation and future borrowing costs continues to dampen confidence, even after the recent decline in oil prices offered some relief. The organisation also noted that the Bank of England's decision to leave interest rates unchanged has done little to dispel concerns over the future path of monetary policy.

RICS believes housing market activity is likely to remain subdued in the near term until there is greater clarity over both the political landscape and the outlook for interest rates. While some indicators have improved from earlier lows, survey responses suggest buyers and sellers remain cautious as they wait for stronger economic signals before committing to property transactions.

The latest survey points to a housing market that may be finding a floor after months of weakness, but one that is still vulnerable to shifts in inflation, monetary policy and broader economic uncertainty.