UK housing market July demand remained weak, with buyer inquiries and agreed sales both stuck at the same depressed levels recorded in June, according to the Royal Institution of Chartered Surveyors (RICS). Geopolitics, the domestic political climate and the cost of mortgage finance are all continuing to weigh on sentiment, RICS said.
RICS publishes a monthly survey in which property professionals are asked whether key measures, such as buyer inquiries and agreed sales, are rising or falling. The results are expressed as a net balance: the percentage of respondents reporting a rise minus those reporting a fall.
Buyer Inquiries and Sales Both Flat in July
A net balance of 28% of property professionals saw a fall in new buyer inquiries in July, unchanged from June. Although the reading is still negative, it marks an improvement from a recent low of 41% in March, which RICS said suggests the pace of deterioration in demand has at least eased.
Agreed sales told a similar story. A net balance of 30% of professionals saw a fall in sales agreed, also unchanged from June, though less negative than the 37% recorded in April. On the supply side, only a small net balance of 4% of professionals reported a fall in new seller instructions in July, compared with a more negative 23% in June, pointing to some stabilisation in the flow of homes coming to market.
Looking ahead, expectations for sales are edging upwards. A balance of 3% of professionals expect an increase in house sales over the coming months, which RICS said is the most positive forward-looking reading it has recorded since February.
House Prices Falling More Widely Than Rising
House price falls continued to outweigh increases across the UK. A net balance of 30% of professionals reported house prices falling in July, slightly less negative than the 32% who said the same in June. London, the South East and South West of England reported more negative readings than the national average.
Northern Ireland continued to buck the national trend, with professionals there still reporting rising prices. Scotland, after a period of stronger growth, appears to be flattening, according to RICS. Over the next 12 months, a balance of 4% of professionals expect house prices to increase across the UK, though London stands out as the area with least confidence.
Those regional pressures were thrown into sharper relief by RICS data showing particularly steep declines in parts of England: East Anglia recorded a balance of -64% on house prices, and the South West -46%, underscoring how unevenly the downturn is distributed across the country.
The Picture Darkened Further Into August
The July numbers were already subdued. What followed was worse. According to Reuters, the RICS house price balance fell to -19 in August from -13 in July, its weakest reading since January 2024, when it stood at -23. New buyer enquiries dropped to a net balance of -17 in August, down from -7 in July and the lowest since May. Agreed sales also slipped, falling to -24 in August from -17 the month before.
Taken together, those August figures suggest the tentative signs of stabilisation visible in the July data did not hold.
What the Experts Said
RICS chief economist Simon Rubinsohn said: ‘The housing market remains subdued, and while that is not unusual over the summer months, it is clear from the RICS seasonally adjusted data, that the combination of geopolitics, the domestic political climate and the cost of mortgage finance are continuing to weigh on sentiment. Significantly, the forward-looking metrics also remain downbeat, which is not the sort of climate likely to encourage housebuilders to step on the gas on existing sites or in land-buying.’
Tom Bill, head of UK residential research at Knight Frank, said: ‘The backdrop is less volatile than last summer but upwards pressure on mortgage rates and tax uncertainty are the familiar causes of hesitation among buyers, which means demand is improving but from a low base.’
Jeremy Leaf, north London estate agent, said: ‘It may be down to the time of year, but fewer listings mean the relatively low number of proceedable buyers have less choice, which is slowly increasing the pace of decision making. However, the market remains price sensitive so generating buyer traction remains challenging, particularly while uncertainty about possible mortgage rate increases continues.’
Rachel Springall, a finance expert at Moneyfactscompare.co.uk, said the weakness in new buyer inquiries ‘shows the wider issues at play for the housing market, as even with a seasonal summer slowdown, many buyers could be worried about making a large financial commitment right now or feel they need to delay their plans due to mortgage rate volatility’.
In the rental market, tenant demand remained broadly flat in the three months to July while new instructions from landlords continued to fall. RICS said survey feedback repeatedly points to a shortage of good quality rental stock, alongside concerns that taxation, regulation and affordability are influencing landlord and tenant behaviour, with some landlords reducing their portfolios or leaving the sector altogether.
