The outlook for housing sales has deteriorated to its weakest since July 2023, as renewed increases in mortgage interest rates weigh on buyer demand, according to the latest RICS UK Residential Market Survey
October’s findings show subdued demand for housing sales, falling agreed sales and further downward pressure on house prices.
Respondents now expect both sales activity and prices to soften over the next twelve months.
RICS head of market research and analysis, Tarrant Parsons, commented: “Home buyer demand remains subdued, and respondents are bracing for a weaker year ahead for sales given the persistent macroeconomic challenges being faced.”
“In accordance with this, the Bank of England’s rate rise was accompanied by a clear warning that policy may need to tighten further if higher energy costs feed through into wider prices. With inflation now projected to approach 5% next year, mortgage rates are likely to remain elevated for longer, thereby continuing to weigh on the market.”
Majority of the UK reported falling or stagnant demand for housing sales
The new buyer enquiries indicator remained at a net balance of -24%, unchanged from September, with virtually all parts of the UK reporting either falling or stagnant demand for housing.
Meanwhile, the agreed sales balance slipped to -24% from -18%, its weakest reading in three months.
Looking ahead, twelve-month sales expectations fell to a net balance of -17%, the most pessimistic assessment since July 2023. Expectations for the next three months were also negative, at -11%.
Some rays of hope, but overall outlook remains bleak
House prices continued to edge lower, with the headline balance falling to -36% from -34%. This marks a second consecutive monthly deterioration following signs of stabilisation over the summer.
London, East Anglia, the West Midlands and the South East recorded weaker price trends than the headline average. However, the regional picture remains mixed: prices continued to rise firmly in Northern Ireland, while modest growth was reported in Scotland and the North West of England.
Respondents also revised down their expectations for the year ahead. The twelve-month price expectations balance fell to -17% from zero, with separate percentage estimates pointing to a relatively modest decline of around 1%.
The flow of homes coming onto the sales market weakened too. New instructions slipped to a net balance of -8%, from +6% previously, while the market appraisals indicator fell to -34%, its lowest since November 2025.
Together, these suggest the pipeline of new listings could slow further in the coming months.
The lettings market looks slightly more promising
In the lettings market, pressure on rents strengthened as tenant housing demand returned to modest growth while landlord instructions continued to fall.
On the quarterly, seasonally adjusted measure, tenant demand rose to a net balance of +7%, from -1%, while landlord instructions registered -30%.
Against this backdrop, expectations for rental growth over the next three months climbed to +41%, from +29%, their strongest reading since early 2024.
