The July 2025 RICS Residential Market Survey has highlighted renewed weakness in the UK housing market, with previously improving demand and sales slipping back into negative territory.
A net balance of -6% was recorded for new buyer enquiries in July, down from +4% the previous month, reflecting softer demand in areas including East Anglia, the South East and the South West.
Agreed sales fell to a net balance of -16%, compared to -4% in June, signalling a fall in sales volumes.
Near-term expectations are largely flat, with a net balance of +1% anticipating stable activity, while over a 12-month horizon a net balance of +8% expects an improvement.
Supply showed marginal growth, with a net balance of +9% reporting more new listings.
However, the market appraisals measure was at its weakest since December 2024, suggesting a flatter pipeline of new instructions.
Nationally, a net balance of -13% signalled a small average price drop, with Northern Ireland, Scotland and the North West bucking the trend. Prices in East Anglia were reported to be falling faster than the national average.
In lettings, tenant demand held steady, but landlord instructions fell sharply to a net balance of -31%, the weakest since April 2020.
Rental prices are expected to rise over the next three months, with a net balance of +25% of participants forecasting increases.
Jeremy Leaf, north London estate agent and former RICS chairman, said: “Only some vendors are recognising the need for realistic pricing in order to attract attention in view of stock overload, with much of it overpriced, particularly smaller one- and two-bed flats and larger houses.
“Agreed sales are mostly holding supported by falling mortgage rates and a stable employment environment.”
On the lettings market, Leaf added: “We noticed that demand has dropped over the past month or so especially for two-bed flats in older buildings, with more interest in modern, lower maintenance properties.
Landlord rent expectations are often elevated although they are starting to become more flexible on pricing even though we are finding that fewer are wanting to sell.”
Tomer Aboody, director of specialist lender MT Finance, said: “Lower mortgage rates have helped fuel confidence among those looking to take a step onto, or move up, the housing ladder. However, further rate cuts are needed to encourage further activity.
“Transaction numbers are lower than in previous years as a result of higher stamp duty and taxes imposed by the Chancellor in her last budget.
“Sales numbers need to improve as this will benefit the wider economy, not just the housing market.
“Some encouragement is required via a reform in stamp duty to encourage those moving up the ladder, as well as those downsizing, to take the plunge.”
