The UK housing market remained subdued in June, although the latest survey from the Royal Institution of Chartered Surveyors suggests the recent slowdown may be beginning to stabilise.
Survey respondents continued to cite inflation, cost-of-living pressures, political uncertainty and global conflicts as factors weighing on market activity, with some expressing hope that easing geopolitical tensions could support confidence.
New buyer enquiries remained in negative territory, with a net balance of -29%, but this marked an improvement from -34% in each of the previous two months and represented the least negative reading since February.
Agreed sales also remained weak, posting a net balance of -32%, compared with -35% in May.
Despite the subdued market, expectations for sales activity over the next three months improved. The net balance rose to -16%, up from a recent low of -34% in March. Looking further ahead, respondents expect sales volumes over the next 12 months to remain broadly unchanged, with a net balance of +1%.
Supply continued to tighten during June. New instructions from vendors fell further into negative territory, declining to -23% from -10% previously – the weakest reading for more than a year. Market appraisals also declined, pointing to a potentially constrained supply of homes in the coming months.
House prices remained under pressure, with the national headline price balance at -33%, little changed from -34% in May. Respondents in the South East and South West reported the weakest price trends, while Scotland and Northern Ireland continued to record more positive conditions.
Near-term price expectations remained negative but improved from the previous month, rising to -32% from -44%. Over the next year, respondents were modestly more optimistic, with a net balance of +8% expecting house prices to increase, up from +6% previously.
Tom Bill, head of UK residential research at Knight Frank commented, “UK housing market activity is improving from a low base as the military conflict in the Middle East de-escalates and mortgage rates edge lower. However, there is no respite for buyers and sellers with a summer of speculation underway about which property taxes will rise in the Budget.
“Current propositions include a land value tax, which feels like a long-term wish rather than a short-term plan, and capital gains tax reforms that have been considered and discarded by previous administrations. For the third year in a row, uncertainty will keep a lid on prices and sales volumes this summer.”
Jeremy Leaf, north London estate agent and a former RICS residential chairman, agrees that the ongoing worries about the conflict in Iran and its impact on the economy – especially mortgage rates and inflation – as well as domestic political uncertainty means home buying and selling is being pushed further down the ‘to-do’ list.
“Nevertheless, those who need rather than want to move are negotiating hard and trying to anticipate the market’s direction of travel,” he 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, bearing in mind these distractions are likely to continue for a few more months at least,” Leaf added.
In the lettings market, tenant demand picked up, with the headline net balance rising to +18%, the strongest reading since May 2025. Landlord instructions remained negative at -18%, pointing to continued supply constraints. Against this backdrop, rents are expected to continue rising, with projected rental growth over the next twelve months standing at around 2.5%.
Leaf continued: “Lettings activity is proving more resilient than sales. Demand remains strong although the quantity of enquiries is outweighing quality.
“Rents are holding up well – and even hardening for family houses – but that’s more to do with the shortage of supply prompted by landlords’ selling due principally to future tax and regulatory concerns including the Renters’ Rights Act.
“Looking forward, we expect this pattern to continue as we are aware more landlords will try to sell when existing tenants’ tenancies end and are not being replaced in anything like sufficient numbers to noticeably shift the rental dial.”
The North of England continues to express more positive sentiment than the South generally. The North, like the Celtic nations, expresses generally stronger sentiment.
Dan Stocks, a surveyor in Guildford, said: “Market uncertainty remains due to Labour leadership changes, cost-of-living pressures, fuel prices, the ongoing Russia–Ukraine war and the recent conflict involving Iran, all of which continue to weaken confidence.”
Whilst expressing similar concerns, Paul Mcskimmings of Edward Watson Associates in Newcastle-upon-Tyne was more optimistic.
He commented: “Despite difficulties with world conflicts and political instability at home, instructions have remained constantly high. It will be interesting to see what happens to the market following a change of prime minister.”
RICS head of market research and analysis, Tarrant Parsons, added: “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. That said, any nascent improvement remains fragile and is now being tested by renewed political uncertainty on the domestic front.
“While the Bank of England left interest rates unchanged, uncertainty around the outlook for inflation and borrowing costs continues to weigh on sentiment, even if the recent decline in oil prices is a welcome development. 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.”
