The Royal Institution of Chartered Surveyors (RICS) UK Residential Property
Survey for March 2025 found the market in a softer position.
The initial rush to complete sales before the April 1 deadline notably
subdued towards the latter end of March, according to respondents.
Market professionals turned increasingly cautious on the near-term sales
outlook, although twelve-month expectations remain somewhat positive for now.
New buyer demand slipped to a net balance of -32% in March, down from a reading
of -16% overall last month. What’s more, the latest result marks the weakest
demand sentiment since September 2023.
For agreed sales, the March net balance of -16% represents a slight further
deterioration from -13% returned in the previous iteration of the survey.
Looking to the future, three-month sales expectations point to a further dip
in activity over the near term. Further ahead the outlook is not quite as
downbeat, with a net balance of +11% of survey participants expecting sales
volumes to rise.
Look at house price sentiment, the survey’s headline gauge returned a net
balance of +2% this month, easing from readings of +20% and +11% in January and
February respectively. As such, recent feedback is consistent with price growth
largely flattening out over the past few months. This picture is mirrored
across most of the UK; however, Scotland and Northern Ireland appear more
resilient to downward price pressures.
In the rental market, a rise in tenant demand was reported by a net balance
of +20% of Respondents. This is the first month since October last year where
contributors cited an increase in lettings demand. In parallel, respondents
continue experiencing declines in landlord instructions (net balance -24%).
With letting demand increasing and supply diminishing, unsurprisingly a net
balance of +31% of survey participants envisage rental prices moving higher over the coming three months.
Looking to next month, the impact on the UK property market from
newly-imposed US global tariffs and potential tariff responses by other nations
may stimulate further uncertainty going forward.
RICS Chief Economist, Simon Rubinsohn, said: “The expiry of the stamp duty
break was always going to lead to a pause in activity in the sales market.
However, the latest results, and indeed the anecdotal remarks from respondents
to the survey, suggest that the shift in sentiment has been aggravated by the
slew of negative macro newsflow over the past few weeks.
“Looking forward, the impact on the market will in no small part depend on
how the economy is affected by the emerging trade war and the response of the
Bank of England to the shifting environment. For now, it is noteworthy that the
longer-term RICS expectations metrics are still relatively resilient, but they
have the potential to be blown off course if the tariff headwinds intensify.”
