The property market is in recovery mode after the hiatus caused by Budget uncertainty, but is set to bounce back this year, RICS says.
“Confidence is returning” as “expectations for sales and prices turn decisively more positive”, according to the latest RICS residential market survey.
Buyer demand and agreed sales remained negative in December, and “while activity on the ground remains subdued, the December survey suggests the market may be turning a corner”.
Active start
And “with interest rates expected to fall further and confidence rebuilding, the foundations are being laid for a more active start to 2026”, RICS says.
New buyer enquiries registered a net balance of -24%, while agreed sales came in at -19%, the poll of surveyors reveals.
However, both measures improved slightly on the previous month.
Standout indicator
The “standout indicator” was a shift in in sales expectations over the next three months, which rose to +22%, the strongest reading since October 2024.
House prices continue to edge down nationally, with a net balance of -14%, but the trend is clearly improving.
Tenant demand weakened further in December (-27%), while new landlord instructions stayed negative (-39%).
Rents are expected to keep rising, with average rental growth forecast at around 3% over the next 12 months.
Sentiment shift
Tarrant Parsons, Head of Market Research & Analysis at RICS (main picture), says: “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.”
Industry reaction
Tom Bill, Head of UK Residential Research at Knight Frank, says: “The combination of clarity around taxation and the prospect of further rate cuts means demand in the first weeks of January has been stronger than normal.”
He warns though “that doesn’t mean the market is now on an upwards trajectory and domestic political risks could still undermine sentiment over the next six months.”
There is a buoyant mood in the housing market.”
Tomer Aboody, Director at MT Finance, says: “Whether it’s the new year boost or the reduction in base rate at the end of last year, there is a buoyant mood in the housing market with good activity from buyers and sellers alike, with more stock soon to come to the market.
“As we continue to digest the Budget, many are coming to terms with the current situation and choosing to make their move. With the prospect of further rate reductions, we are hoping to see increased activity in the form of more transactions as the year pans out.”
No sign of ‘quick upturn’ for property market, warns RICS
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