A sluggish property market is set to continue into the new year, according to the latest RICS market survey.

It describes the current trend as “subdued momentum”, with buyer demand and agreed sales negative for the third consecutive month.

The main points from the RICS update for September:

–   Buyer interest weakens: The net balance for new buyer enquiries slipped further to -19%.

–    Sales activity softens: Agreed sales posted a -16% net balance, indicating a continued slowdown despite a slight improvement from -24% in August.

–   Downward pressure on house prices: The national price balance of -15% indicates modest downward movement, with the South East and East Anglia experiencing the sharpest declines.

–   Regional divergence persists: Scotland and Northern Ireland remain outliers, continuing to see modest price gains.

–    New listings slowing: New vendor instructions recorded a -15% balance, the second consecutive monthly drop.

–    Rental market tightens further: Tenant demand was broadly flat (-1%), while landlord instructions dropped sharply to -38%, the lowest since May 2020. Rents are expected to rise by around 3% over the next year.

While short-term price pressures remain negative (-21%), a net balance of +12% of respondents expect prices to rise again over the next year.

Surveyors across the country cited concerns over the upcoming November Budget, which many expect to include further property-related taxation.

The housing market continues to struggle for momentum.”

Tarrant Parsons, Head of Market Research & Analytics at RICS, says: “The housing market continues to struggle for momentum, with seemingly no clear catalyst on the horizon to spark a turnaround over the near-term.

“Buyer demand remains subdued, while agreed sales are still on a downward trend, reflecting a broader hesitancy in the market,” he says.

“Ongoing uncertainty around potential measures in the upcoming Budget is also likely adding to the prevailing cautious sentiment.”

Industry reaction

Tom Bill, Head of UK Residential Research at Knight Frank

“Activity in the UK housing market has been building since April, a month when confidence was dented by higher rates of stamp duty and tariff-related turmoil on financial markets.

“Demand has been supported by stable mortgage rates and downwards pressure on asking prices due to high levels of supply. However, there is a creeping mood of hesitation as November’s Budget moves onto the radar, and a game of ‘guess the tax rise’ takes place for the second successive year.”