Higher mortgage rates and ongoing geopolitical uncertainty continue to weigh heavily on the UK housing market with buyer demand and agreed sales remaining firmly negative, the latest RICS Residential Market Survey reveals.

The April 2026 survey found new buyer enquiries remained deeply subdued, posting a net balance of -34%, although this was slightly improved from -40% in March.

Agreed sales also stayed weak at -36%, while near-term sales expectations remained firmly negative, highlighting continued caution across the market.

RICS said higher borrowing costs, inflation concerns and uncertainty linked to the conflict in the Middle East were continuing to suppress activity, particularly across southern England and London.

HOUSE PRICE PRESSURE

The headline house price indicator fell to -34% in April from -25% the previous month, with respondents reporting the sharpest downward pressure in London, the South East, East Anglia and the South West.

By contrast, northern England, Scotland and Northern Ireland continued to outperform, with prices still rising in Scotland and Northern Ireland and marginal growth continuing across parts of the North West and North of England.

Market conditions are unlikely to improve significantly in the short term.

Forward-looking indicators suggest market conditions are unlikely to improve significantly in the short term.

RICS found near-term sales expectations for the next three months stood at -32%, while twelve-month expectations slipped into marginally negative territory at -6%.

Supply-side indicators also weakened, with the new appraisals measure falling to -16%, suggesting the flow of future listings could soften further.

The rental market meanwhile continued to see demand exceed supply, with tenant demand posting a net balance of +14% while landlord instructions remained negative at -17%.

A net balance of +25% of respondents expect rents to rise over the coming months.

CHALLENGING ENVIRONMENT

Tarrant Parsons (main picture, inset), head of market research and analysis at RICS, said: “April’s results show a housing market still in the grip of macro headwinds stemming from the Middle East conflict.

“Recent warnings from the Bank of England that interest rate rises may be required to tackle renewed inflation, driven by elevated oil prices and disrupted supply chains, underline the challenging environment facing buyers.

“Until there is a clearer path for inflation and borrowing costs, activity and sentiment look set to remain subdued, particularly across southern England and London where affordability pressures are most acute.”

MIDDLE EAST UNCERTAINTY

Roshan Sivapalan MRICS of Blakes Surveyors in London, said: “Ongoing Middle East uncertainty and recent mortgage rate increases are suppressing sales activity.

“However, demand persists for realistically priced stock, and the market continues to function where pricing aligns with buyer expectations.”

And Neil Foster MRICS of Hadrian Property Partners in Northumberland, added: “The sales market shuddered at the start of conflict in the Middle East, and the continued (relatively) high cost of borrowing has suppressed the investment market. However, sales activity appears to be reviving, and we expect May to yield an increase in activity.”

NEGATIVE IMPACT

Tomer Aboody, director of specialist lender MT Finance, said: “A combination of higher mortgage rates, lack of confidence in the government, global conflicts and the soaring cost of living, are having a negative impact on the housing market, as both buyers and sellers alike think twice about making a move.

“The South East and London markets are feeling the brunt of this, due to the higher price point for buyers, with affordability even more of an issue.”

Jeremy Leaf, north London estate agent and a former RICS residential chairman, added: “Market activity was previously supported not only by wage growth outpacing house prices but by mortgage offers obtained at more advantageous rates before the war in Iran began.

“However, now those elements are beginning to unravel as hostilities persist, concerns about near-term interest rates and inflation are proving more relevant. The result is buyers and sellers are reverting to cautious mode. The amount of stock available – particularly of flats – means buyers find themselves in a strong position.

“Fortunately, relatively few previously-agreed sales are falling through though we are seeing more re-negotiations and price reductions as the need-to-move sellers try to achieve their aims.”