The latest Royal Institution of Chartered Surveyors (RICS) UK Residential Market Survey showed that while new buyer enquiries remained in the negative, there was a slight improvement in activity.
Surveyors returned a score of negative 29% for new buyer activity compared to negative 34% in the last two months, making this the least negative reading since February.
Activity for newly agreed sales stayed relatively flat, from negative 35% at the last survey to negative 32% in June.
Surveyors predicted the market would rebound in the near term, giving a score of negative 16% for sales expectations over the next three months, up from the recent low of negative 34% in March. Over the longer term, respondents expect sales volumes to stay flat, with a reading of 1%.
Fewer instructions took place in June, with respondents giving a lower score for activity compared to the previous month. This dropped from negative 10% to negative 23%, the weakest reading in over a year. There was also a fall in market appraisals, suggesting the pipeline of homes coming to market could be lower over the coming months.
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Surveyors continued to predict slight falls in house prices, with some regions expected to face more negative price trends, such as the South West and South East of England.
House price growth will remain muted in the near term and pick up modestly over the next 12 months, surveyors said.
Tarrant Parsons, head of market research and analysis at RICS, 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. 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.”
Caution among some homebuyers
Rachel Springall, finance expert at Moneyfactscompare.co.uk, said the supply of homes coming to market was “beginning to thin”, and volatility in mortgage pricing and geopolitical uncertainty may have caused some homeowners to pause their plans.
“Overall, market sentiment remains subdued, although downward pressure on house prices appears to be easing,” Springall added.
Jeremy Leaf, North London estate agent and a former RICS residential chair, said ongoing worries about the conflict in Iran and its impact meant “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.
“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,” he added.
Rising tenant demand and suppressed landlord instructions to cause rent increases
The RICS survey showed a rise in tenant demand, with surveyors giving a reading of 18%, the strongest since May 2025.
However, landlord instructions remained negative, further weighing on the supply-demand imbalance.
Surveyors expected this to put upward pressure on rents, with projected rental growth of around 2.5% over the next 12 months.
Leaf said: “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.”
Springall said that although landlord instructions had improved slightly, they remained in the negative and demand was outstripping supply.
She added: “The imbalance between supply and demand in the rental sector will need to ease to make any significant difference to prospective tenants. Until then, renters may see a continuation of rising rents and fierce competition for available rental properties.”
