According to the latest Royal Institution of Chartered Surveyors (RICS) survey for December, new buyer enquiries registered a net balance of minus 24%, which is an improvement from minus 30% in the prior month, but is the sixth successive negative reading, showing a more “subdued” market.
Agreed sales for December came in at minus 19%, which is a slight improvement from minus 22% in the previous month.
RICS said this shows a “contraction in activity, even if the pace of decline appears to be easing marginally”.
Looking at near-term expectations for agreed sales, this came to a positive net balance of 22%, which is the most positive reading since October 2025.
The 12-month outlook has also brightened, with a net balance of 34% expecting sales to rise, up from 15% previously and the strongest reading since the end of 2024.
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On the supply side, new instructions had a negative balance of 0% in December, up from minus 15% in the previous survey, showing a more “stable picture”.
The net balance for market appraisals is at minus 30%, showing that a significant uptick in new instructions is “unlikely just yet”, RICS said.
House prices flat in December
Looking at house prices, the net balance in December came to minus 14%, unchanged from November.
However, the report said that while this suggests house prices are falling at a national level, this could be stabilising. London and the South East see more pronounced declines, but Scotland and Northern Ireland are moving higher, the report said.
In terms of house price expectations, for the next three months, the net balance is minus 6%, which is up from minus 14% previously.
For the year ahead, a net balance of 35% think house prices will rise, up from 24% in November.
Rent expected to grow by 3% in year ahead
Looking at lettings, tenant demand net balance came to minus 27%, a worsening from minus 22%. This is the weakest since the early stages of the pandemic.
The net balance for new landlord instructions is at minus 39%, and in the near term, 19% of respondents think rental prices will edge higher.
In the year ahead, respondents think rents will grow by around 3%.
‘Tentative signs of shift in sentiment’
Tarrant Parsons, RICS’ head of market research and analysis, said: “The UK residential market remains in a prolonged soft patch, with December’s survey recording a sixth consecutive month of negative momentum in buyer enquiries. That said, there are tentative signs of a shift in sentiment beneath the surface.
“Near-term sales expectations have strengthened, and the 12-month outlook has edged into more positive territory. The key test for 2026 will be whether borrowing costs ease on a sustained basis. If so, this could provide the catalyst needed to drive a recovery in buyer demand.”
Jeremy Leaf, North London estate agent and a former RICS residential chair, added that a fall in interest rates and inflation may have “arrived too late last month to have much impact on activity”.
“However, market activity has certainly perked up in our offices since confirmed in this historically reliable lead indicator report. A two-tier market is developing, with more interest in smaller two- and three-bedroom houses, where prices are hardening, rather than larger, more expensive homes likely to be affected by the new mansion tax.
“Conversely, an over-supply and worries about outgoings for flats is reducing demand so values of many are also softening. Continuing uncertainties, particularly about the economy and closer-to-home unemployment prospects, are still influencing decision-making too,” he noted.
