The August 2025 RICS Residential Market Survey found sales activity continued to slow, with most parts of the UK showing a drop in new buyer enquiries.
The net balance for new buyer enquiries fell to -17%, down from -7% the previous month, showing demand weakening further.
Agreed sales also dropped, with the net balance slipping to -24% from -17% in July.
Forward-looking sentiment stayed flat, with the net balance for expected sales over the next three months at -2% and only +1% for the year ahead, the lowest since October 2023.
New vendor instructions posted a net balance of -3%, the first negative reading since June 2024, showing new listings have flattened out.
The market appraisals indicator was -7%, suggesting a weaker trend compared to a year ago.
House prices came under more pressure, with a headline net balance of -19%, compared to -13% and -7% in previous months.
East Anglia and the South West saw the biggest falls, at -64% and -46% respectively, both worse than last month.
In contrast, Northern Ireland continued to see prices rise.
Over the next three months, respondents expected prices to edge down further, with a net balance of -20%.
On a 12-month view, a small rise of +9% was expected, the weakest since December 2023.
For lettings, tenant demand was mostly unchanged, with a net balance of +5%.
Landlord instructions dropped sharply to -37%, the lowest since April 2020.
On rents, +27% of respondents expected increases over the next three months, and around 3% annual growth was pencilled in.
REACTION:
Jeremy Leaf, north London estate agent and a former RICS chairman:
“Demand is weakening but we have continued to agree sales of houses in particular over the past few weeks during and since the summer holidays.
“However, quality is trumping quantity in terms of viewing numbers in our offices at the moment.
“On the other hand, flats are proving more challenging to sell mainly due to the amount of choice.
“Overall, listings are increasing faster than enquiries, making transactions even more protracted and resulting in softening prices.
“Around 25 per cent of our buyers and sellers too seem to have paused since rumours of additional property taxes being introduced in the Budget began circulating.”
“We have noticed recently many tenants appear to have reached an affordability ceiling just as we are approaching the busiest time of the year for lettings activity.
“Many are finding it increasingly difficult to meet what they perceive as unrealistic landlord aspirations for new and renewed rents despite the ongoing drop in stock partly prompted by landlords leaving the sector.
“One and two bedroom flats remain in most demand and shortest supply.”
Tomer Aboody, director of specialist lender MT Finance:
“The threat of further taxes on the way is having a big effect both on the sales and rental sectors.
“With a limited amount of buyers, sellers are needing to reduce pricing in order to attract those willing to commit, whereas the opposite is happening in the rental market, as rents increase due to fewer buy-to-let landlords as they exit the sector.
“Let’s hope the Chancellor sees that the market needs help and tries to revive it, benefiting the wider economy at the same time.”
