According to the Royal Institution of Chartered Surveyors (RICS) UK Residential Property Survey, there were signs of uncertainty across the UK property market during the month.
RICS also said this could be impacted by people running out of time to complete property purchases before the stamp duty threshold falls.
Further, uncertainties around geopolitical and international economies were also thought to be contributing to this slowdown.
The metric for newly agreed sales fell into the negative from 2% in January to minus 13% in February, the softest score since May last year.
Surveyors were cautious about the future of the housing market, returning a score of minus 5% when predicting sales in the near term, down from a reading of 9% previously. The long-term outlook for sales in the next 12 months was more positive, generating a score of 32%, but this was the least optimistic prediction since the end of 2023.
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House prices to continue rising
Despite this, respondents reported a continued rise in national house prices, with a score of 11%. RICS said this was consistent with a subtle increase in values, although it was lower than the readings of 25% and 21% given in December and January respectively.
It said house price growth had tapered off in most parts of the UK, with the exceptions of Northern Ireland, Scotland and the North West of England.
Making a prediction for the next 12 months, surveyors forecast that house prices would continue to climb with a reading of 47%. This was in line with the average reading that has been given over the last six months.
For new property listings, surveyors gave a reading of 12%, continuing an eight-month trend of positive readings, pointing to more available housing stock. The score for market appraisals in February was 16%, suggesting a steady pipeline for new instructions.
Housing market ‘losing momentum’
Simon Rubinson, chief economist at RICS, said: “The UK housing market appears to be losing some momentum as the expiry of the temporary increase in stamp duty thresholds approaches. Some concerns are also being expressed by respondents about the re-emergence of inflationary pressures and the more uncertain geopolitical environment. That said, looking beyond the next few months, sales activity is seen as likely to resume an upward trend, with prices also moving higher.
“A key support for the market continues to be the increased flow of existing stock becoming available, giving buyers a greater choice of options. However, leading indicators around new build remain subdued for now, highlighting the significance of the Planning and Infrastructure Bill introduced to Parliament this week.”
Low tenant demand
In the rental market, tenant demand was recorded at below zero for the fourth month running, with a score of minus 4%.
RICS said this was the longest period of negative tenant demand since its records began in 2012. However, because it was just below zero, RICS said this pointed to a stagnant or slightly negative trend, rather than a sharp decline.
Landlord instructions were also negative at minus 22%.
Despite the subdued tenant demand, respondents gave a score of 34% for rental prices rising in the next three months, up from a reading of 18% in January.
Rubinson added: “Despite a flatter trend in demand for private rental properties, the key RICS metric capturing rental expectations is still pointing to further increases, demonstrating that the challenge around supply spans all tenures.”
