The Royal Institution of Chartered Surveyors (RICS) UK Residential Survey for July 2025 saw the housing market retreat slightly as previous signs of recovery became uncertain.
Tentative signs of recovery that emerged in previous monthly feedback were partially reversed, with measures of demand and agreed sales slipping back into slightly negative territory. Meanwhile, forward-looking sentiment now points to a largely flat picture for activity in the near-term.
New Buyer Enquiries reported a net balance of -6% in July, down from +4% in June - implying a slight softening in demand compared to the prior survey period. That said, there appears to be increasingly variable results across different parts of the country, with relatively weaker demand trends reported in East Anglia, the South East and the South West of England.
With respect to agreed sales, a headline net balance of -16% was posted in July, marking a renewed deterioration compared to the reading of -4% registered in June. Going forward, respondents envisage a generally flat near-term sales outlook, evidenced by a net balance reading of just +1% being returned (versus +7% previously). At the twelve-month time horizon, sentiment is a little more positive, with a net balance of +8% of contributors anticipating a pick-up in sales activity.
Looking at changes in supply, a net balance of +9% of respondents cited an increase in the flow of new listings coming onto the market, albeit this latest reading is consistent with only marginal growth.
Turning to house prices, at the national level, a net balance of -13% was recorded for the survey’s headline gauge of price growth. As such, this signals a small downward adjustment in average house prices across the country, with the latest feedback weakening slightly from readings of -7% returned in each of the previous two monthly reports. Going against the broader trend however, prices continue to rise in Northern Ireland and Scotland, while respondents based in the North West of England are also seeing prices move higher. Conversely, prices are reportedly falling at a more significant rate than the national average (in net balance terms) across East Anglia.
In the lettings market, tenant demand held steady in the three months to July, recording a net balance +4% (easing from a reading of +14% in the previous quarter). Alongside this, a firmly negative trend in landlord instructions, which is the act of a landlord making their property available for rent, continues to be reported. In fact, the latest net balance of -31% is the weakest since April 2020. Very much associated with the lack of supply coming through, rental prices are anticipated to continue to rise over the next three months by a net balance of +25% of survey participants.
RICS Chief Economist, Simon Rubinsohn, said: “The somewhat flatter tone to the feedback to the July RICS Residential Survey highlights ongoing challenges facing the housing market. Although interest rates were lowered at the latest Bank of England meeting, the split vote has raised doubts about both the timing and extent of further reductions.
"Meanwhile, uncertainty about the potential contents of the Chancellor’s autumn budget is also raising some concerns. Against this backdrop, respondents continue to report that the market remains particularly price sensitive at the present time.“
