UK Housing Market Awaits Recovery Amid Flat Sales: UK 2026

Key Points:

• New buyer enquiries recorded a net balance of -28% in July, remaining completely flat compared to June.
• Agreed sales stood at a net balance of -30%, staying unchanged month-on-month.
• Supply-side activity showed signs of stabilisation, with new vendor instructions improving to -4% from -23% in June.
• The national house price balance edged up slightly to -30% from -32% in June, though price reductions continue to outpace increases across the country.
• Regional disparities remain pronounced, with London, the South East, and the South West experiencing steeper price contractions, while Northern Ireland sees continued price growth.
• Near-term sales expectations improved to -14%, while twelve-month sales expectations moved into positive territory at +3%.
• The lettings sector continues to face severe supply deficits, as landlord instructions dropped to -27%, driving three-month rent expectations up to +28%.

LONDON (Cardiff Daily) August 13, 2026 – The United Kingdom residential property market remained in a subdued state throughout July, with both buyer demand and agreed sales failing to generate any meaningful recovery, according to the latest figures published in the Royal Institution of Chartered Surveyors (RICS) UK Residential Market Survey.

What is the current condition of buyer demand and sales activity in the UK?

As reported by real estate analyst Sarah Henderson of Mortgage Introducer, the headline measure for new buyer enquiries registered a net balance of -28% in July, showing no change from the reading recorded in June.

Although this figure remains firmly within negative territory, property market data demonstrates that it has recovered from a low of -41% recorded earlier in the year in March, suggesting that the velocity of demand deterioration has slowed down.

Agreed sales activity mirrored this flatline trajectory. As detailed by financial reporter Mark Higgins of The Negotiator, the agreed sales indicator posted a net balance of -30% in July, matching the previous month’s result precisely. This reading represents a slight improvement from the -37% recorded in April, yet confirms that transaction volumes across the country remain heavily restricted.

Commenting on the structural factors influencing the market, Simon Rubinsohn, Chief Economist at RICS, stated that

“The housing market remains subdued, and while that is not unusual over the summer months, it is clear from the RICS seasonally adjusted data, that the combination of geopolitics, the domestic political climate and the cost of mortgage finance are continuing to weigh on sentiment.”

How are house prices and property listings performing regionally across the nation?

Supply-side metrics presented a slight stabilization during the month. As highlighted by property journalist David Miller of Inside Conveyancing, new vendor instructions returned a net balance of -4% in July, marking a substantial bounce back from the -23% recorded in June.

Furthermore, market appraisals measured against the corresponding period last year posted a positive balance of +19%. Despite this uptick in valuations, overall listing inventory remains historically constrained across estate agency branches.

National house prices continue to experience downward pressure. The national house price balance stood at -30% in July, edging up marginally from -32% in June and -35% in April.

However, regional disparities across the UK remain pronounced. Surveyors in London, the South East, and the South West reported price balances significantly more negative than the national average. Conversely, Northern Ireland continues to record sustained upward movement in house prices, whereas price momentum in Scotland has begun to level off.

Regarding the impact on property developers and broader construction activity, Simon Rubinsohn, Chief Economist at RICS, stated that

“Significantly, the forward-looking metrics also remain downbeat, which is not the sort of climate likely to encourage housebuilders to step on the gas on existing sites or in land-buying, as highlighted in recent trading statements from developers.”

What is the forward outlook for sales expectations and the private rented sector?

Forward-looking metrics offered a modestly mixed picture. Near-term sales expectations over the next three months improved for the fourth consecutive month to a net balance of -14%.

On a twelve-month horizon, sales expectations turned positive at +3%, representing the highest level of optimism recorded by the survey since February. Conversely, short-term price expectations remain muted at -31%, while twelve-month price expectations stand at a modest +4%. London exhibited particular softness, with year-ahead price expectations falling sharply to -23% from -10% in the prior survey.

In the lettings market, structural supply constraints continue to dictate terms. Tenant demand softened to a net balance of -1% over the three months to July, down from +12% in the previous period.

However, landlord instructions remained deeply negative at -27%, pointing to an ongoing exodus of private landlords from the sector. As a consequence of this structural supply deficit, three-month rent expectations climbed to a net balance of +28%, up from +25% in the prior report.

Addressing the legislative pressures affecting private landlords, Simon Rubinsohn, Chief Economist at RICS, stated that

“Feedback from respondents to the RICS survey is continuing to draw attention to the impact of latest round of regulation on the rental market with the key indicator of new instructions pointing to a further drop in supply.”

Explore More UK News

England Flash Drought Worsens as 71% Enters Official Crisis: England 2026

Middlesbrough Guide: History, Culture, Attractions, Economy, Transport and Essential Facts for Visitors

What is the background of this development?

The UK housing market has experienced prolonged volatility following a series of aggressive interest rate adjustments initiated by the Bank of England to combat elevated headline inflation. Mortgage borrowing costs rose sharply from historic lows, severely constraining buyer affordability and transaction volumes throughout late 2022 and the entirety of 2023 and 2024. Although mortgage rates have stabilized from their peak levels, elevated borrowing costs relative to the preceding decade continue to weigh on household purchasing power.

Furthermore, regulatory reforms in the private rented sector—including proposed changes to tenant eviction rules, stricter energy performance requirements, and higher tax burdens on buy-to-let properties—have led many private landlords to scale back their portfolios or exit the market altogether, exacerbating rental supply shortages nationwide.

How will this development affect home buyers, sellers, and tenants?

The prolonged stagnation in the residential property sector carries direct implications for buyers, vendors, and tenants across the United Kingdom.

For prospective home buyers, particularly first-time purchasers, the current environment offers a landscape of diminished competition and modest price corrections in several regions, notably London and the South East.

However, high mortgage rates continue to pose a formidable hurdle to affordability, limiting borrowing capacity and forcing buyers to adjust their expectations or delay purchases until financing costs drop further.

For property sellers, the data signals a need for realistic pricing strategies. With buyer demand remaining constrained and agreed sales stagnant, vendors who fail to price competitively risk prolonged periods on the market. Sellers in regions experiencing stronger price resilience, such as Northern Ireland, remain in a relatively advantageous position compared to those in southern English regions.

For tenants in the private rented sector, the persistent decline in landlord instructions indicates that rental housing availability will remain severely restricted.

As demand continues to outstrip available stock, tenants are likely to face ongoing upward pressure on monthly rental prices, placing additional strain on household budgets across urban and suburban areas alike.