Estate agents should prepare for subdued transaction volumes over the next 12 months, according to the latest Royal Institute of Chartered Surveyors (RICS) monthly housing survey.
The data suggests the market may have passed its worst point, though any recovery remains tentative. New buyer enquiries recorded a negative net balance of -29%, a marginal improvement from -34% in the previous two months and the least negative reading since February.
Newly agreed sales remained weak at -32%, compared with -35% previously. Near-term sales expectations improved to -16%, up from a recent low of -34% in March. Looking ahead 12 months, respondents expect sales volumes to remain broadly flat, with a positive net balance of just 1%.
Price pressures persist
House prices continue to face downward pressure nationally, with the headline price balance at -33%, broadly unchanged from recent months. The sustained weakness in pricing comes amid broader pressures facing the sector, with some housebuilders discounting unsold homes to maintain sales momentum.
Tarrant Parsons, RICS’ Head of Market Research and Analysis, said: “June’s survey results offer some cautious encouragement that the worst of the slowdown in market activity may be beginning to pass, with several key indicators moving in a less negative direction for a second consecutive month.”
He added: “That said, any nascent improvement remains fragile and is now being tested by renewed political uncertainty on the domestic front. Until there is greater clarity over both the political backdrop and the path of interest rates, housing market activity is likely to remain relatively subdued in the near term.”
Industry perspectives
Tom Bill, head of UK residential research at Knight Frank, noted that activity is improving from a low base as Middle East military conflict de-escalates and mortgage rates edge lower. However, he warned: “There is no respite for buyers and sellers with a summer of speculation underway about which property taxes will rise in the Budget.”
Bill highlighted that current propositions include a land value tax and capital gains tax reforms previously considered and discarded by past administrations. “For the third year in a row, uncertainty will keep a lid on prices and sales volumes this summer,” he said.
Jeremy Leaf, a north London estate agent and former RICS residential chairman, said ongoing worries about conflict in Iran and its economic impact, alongside domestic political uncertainty, means home buying and selling is being pushed down the priority list. While financing activity continues in some sectors, with portfolio landlords securing refinancing deals, the broader market remains constrained.
“Nevertheless, those who need rather than want to move are negotiating hard and trying to anticipate the market’s direction of travel,” Leaf said. “The net result is prices and activity are holding up better than we dared hope, although we are not expecting a significant summer rebound.”
Outlook
The survey indicates the UK housing market remains in a holding pattern, with transaction volumes and prices under pressure from interest rate uncertainty, political instability, and geopolitical concerns. While some indicators show marginal improvement, the overall sentiment points to continued weakness in the near term.
