The latest RICS UK Residential Market Survey shows that the Autumn Budget did little to revive activity, with most indicators remaining negative and agents deferring hopes of a recovery until spring 2026.
While respondents acknowledged that extensive leaks ahead of the Budget unsettled many would-be movers, there was relief that the High Value Council Tax Surcharge applies only to properties above £2 million.
ENQUIRIES, INSTRUCTIONS AND SALES REMAIN SUBDUED
New buyer enquiries fell sharply, recording a net balance of -32% in November compared with -24% in October. It is the weakest reading since late 2023 and reflects a clear drop in demand during the weeks leading up to the Budget.
Agreed sales followed a similar trend, with a net balance of -23%, little changed from the previous month’s figure.
Near-term sales expectations slipped to -6%, down from -3% in October, suggesting little prospect of a turnaround before the end of the year. Over a 12-month horizon, however, sentiment is improving. A net balance of +15% of survey participants expect sales activity to rise, up from +7% in October.
Supply also remained constrained. New instructions produced a net balance of -19%, broadly consistent with October’s -20%. The number of market appraisals being carried out fell further, at -40%, pointing to a thin pipeline of new listings as the market moves into winter.
LONDON PRICES HIT HARDEST
House prices at national level posted a net balance of -16%, signalling a continued gentle decline. London stood out as the most affected region, slipping to -44% amid a weakened top end of the market following the introduction of the High Value Council Tax Surcharge.
By contrast, survey respondents in Northern Ireland and Scotland reported ongoing upward pressure on prices.
Expectations for near-term pricing were largely unchanged at -15%, while the 12-month outlook strengthened to +24%, the most optimistic reading since June.
LETTINGS MARKET SHOWS SIGNS OF COOLING
The lettings sector also showed signs of strain. Landlord instructions remained firmly in negative territory at -39%, with many respondents citing the new income tax on property announced in the Budget as a potential deterrent for investors.
Tenant demand delivered its weakest reading since April 2020, falling to a net balance of -22%. Although some of this reflects seasonal patterns, RICS notes a broader softening in demand. Near-term rental price expectations held at +6%, pointing to only marginal rises over the next quarter. Over 12 months, respondents anticipate a +2.5% increase, slightly below recent averages.
RICS chief economist Simon Rubinsohn said: “The housing market has been struggling for momentum for several months, and the recent Budget announcements are unlikely to materially shift that picture.
“The ending of Budget related uncertainty is welcome, but the fundamental challenges of affordability and elevated borrowing costs will in all probability keep activity subdued in the near term.
“That said, the 12-month outlook has brightened somewhat, likely reflecting a growing sense that the Bank of England may have a little more scope to reduce interest rates than seemed plausible only a short while ago.
“Meanwhile in the lettings market, although tenant demand does appear to be softening the lack of stock is keeping rental expectations elevated and the additional tax levied on landlords in the Budget will likely exacerbate this trend.”
Tom Bill, head of UK residential research at Knight Frank, said: “The barrage of property tax speculation before the Budget unsurprisingly soured sentiment among buyers and sellers.
“Now there is clarity, we expect existing transactions to accelerate before Christmas, and activity should remain relatively strong in early 2026.
“A downwards trajectory for interest rates will support demand but political uncertainty will become the key risk.
“The game of ‘guess the tax rise’ played in recent months could become a game of ‘guess the Chancellor’ if next spring’s local elections are as bad for Labour as the polls suggest.”
