The Royal Institution of Chartered Surveyors (RICS) UK Residential Market Survey for January found that surveyors had a less negative outlook on the market than in previous months.
Respondents to the survey gave their least negative reading for new buyer enquiries, returning a score of minus 15%. This was an improvement from a score of minus 21% in December and minus 29% in November.
Similarly, the reading for agreed sales indicated a more favourable outlook, with respondents giving a score of minus 9%, the least negative since June last year.
When asked for their view on the market in three months, surveyors gave a score of 4% for sales expectations, suggesting activity would be flat. This opinion was less optimistic than last month’s score of 22% for the near-term market, suggesting surveyors felt cautious about the next few months.
Looking further ahead, however, respondents gave a score of 35% for sales activity in the next 12 months, indicating a significant rebound in sales activity. This was also the strongest reading since December 2024.
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Supply has stayed stable, as surveyors returned a reading of 1% for new instructions compared to minus 1% in December. Further, a score of minus 11% was given for appraisal activity, with respondents suggesting this was running at a slower pace than last year.
House price growth to stay subdued
Sentiment towards house price movements stayed weak, with surveyors giving a score of minus 10%. Still, this is less negative than the readings over the last four months and up from a score of minus 19% in October.
RICS said this might be the sign of a turning point in the housing market, but further surveys would need to continue in the same direction to confirm this.
Surveyors reported a wider split between house price activity in different parts of the UK. Values are continuing to rise in Northern Ireland and Scotland, and the North West and North regions of England. By contrast, readings were more negative in London, the South West, South East and East Anglia, albeit not as bleak as the previous survey.
Looking ahead, surveyors expect a flat market with regard to house price growth.
A score of minus 4% was given for the next three months, similar to the reading of minus 5% given at the last survey.
For the 12 months ahead, surveyors gave a score of 43% for house prices, suggesting they expected values to rise. This was also the highest score since February 2025 and followed increases in the last five reports.
RICS said the survey pointed to a housing market that “may be entering the early stages of recovery”.
Simon Rubinsohn, chief economist at RICS, said: “There are early signs that market conditions may be improving after a challenging period, although activity levels are still subdued, meaning any recovery is likely to be gradual. While the strengthening 12-month outlook is encouraging, near-term expectations remain relatively soft, reflecting ongoing economic uncertainty.
“Whether this tentative improvement develops into sustained momentum will depend heavily on the trajectory of mortgage rates and broader macro confidence over the coming months.”
Tomer Aboody, director of MT Finance, added: “With an increase in the number of buyers registering with agents, we are hopeful of a market recovery, although this is likely to be gradual.
“With interest rates at more affordable levels than was the case 12-24 months ago, buyers are more keen on moving and taking advantage of cheaper borrowing.
“While the London market is lagging behind the rest of the country due to high house prices and the prospect of a mansion tax as proposed by the Chancellor, some recovery is still visible, with buyers on the whole willing to swallow the extra tax, while some are perhaps hopeful that the next government will abolish it.”
Tenant demand returns
In the lettings market, surveyors gave a score of 13% for tenant demand, ending the reign of flat or negative readings over the last two quarters.
However, RICS said this only pointed to a slight pick-up in demand.
Further, the net balance for landlord instructions was less negative, moving from minus 34% to minus 24%, but still indicated a supply imbalance. Surveyors gave a score of 28% for rental prices, up from 16% at the last survey, hinting at rises to come.
Jeremy Leaf, North London estate agent and a former RICS residential chair, said: “Although we have found more tenants are ‘feeling the pinch’, the shortage of stock prompted particularly by landlords still selling up, has meant rents are holding up relatively well.
“Disappointingly, we are seeing little appetite from would-be investors for new buy-to-let opportunities so the supply/demand imbalance and upward direction of travel for rents is unlikely to change in the near term at least.”
