Market Survey: Activity levels remain subdued for now, but forward-looking metrics turn noticeably more positive
The January 2026 RICS UK Residential Survey results reveal that market activity does remain subdued, with both buyer demand and agreed sales down. However, there are encouraging signs of a shift in market sentiment, and optimism around the Q1 outlook for property sales, both in the near-term and for the year ahead.
- New buyer enquiries and agreed sales indicators still in slightly negative territory.
- Aggregate house prices continue to display marginally negative momentum.
- Both near-term and twelve-month sales expectations turn significantly more positive.
Residential Sales
Based on the RICS UK Residential Market Survey (December 2025), what’s changed isn’t what’s happening right now, but how people are feeling about the months ahead. Agents are more positive about short-term and year-ahead sales than they’ve been for a while. Much of this comes down to uncertainty easing up, expectations around interest rates have softened, and the Budget-related nerves that hung over the market through the autumn have now passed.
On the supply side, things have levelled out. New instructions are no longer falling, which suggests sellers are starting to re-enter the market, albeit cautiously, but with a plan in mind. Market appraisal levels are still below last year, so a big rush of new housing stock looks unlikely, at least for now, but the position feels more settled than it did a few months ago.
House prices continue to drift rather than move sharply in either direction. At a national level, prices do remain under a bit of pressure, but the pace of decline has eased and the picture is starting to stabilise. Regional differences remain clear, with London and the South East still adjusting, while Scotland and Northern Ireland are holding up better.
Looking ahead, expectations around prices have certainly improved. The short-term view points to mostly flat conditions, while more people now expect prices to pick up over the year ahead, rather than fall even further.
Lettings
The lettings market remains under pressure, and the balance between supply and demand is still out of balance. Tenant demand has softened further in recent months, partly reflecting seasonal patterns, but also a market that’s becoming more price-sensitive. At the same time, new landlord instructions remain limited, continuing a trend seen throughout much of 2025. Fewer landlords are coming forward, and the lack of property stock is still shaping the wider rental landscape.
Despite easing demand, rents are still expected to keep edging upwards into 2026. This isn’t being driven by a surge in lots of new tenants, but by the simple reality that there still aren’t enough homes available to meet the ongoing need. Looking ahead into 2026, modest rental growth is expected over the year, with affordability, regulation and supply all likely to remain key challenges for both landlords and tenants.
“Undoubtedly, the December market was held back by budget drag, although there was a period of reflection as it became clear the impact was less damaging than initially predicted. An encouraging number of transactions in the latter half of the month helped lift expectations for a decent January, with early signs of renewed confidence among first-time buyers.
In the lettings market, demand has remained resilient, underpinned by ongoing supply constraints and steady tenant interest, helping to maintain stability despite wider market uncertainty.
In areas driven by lifestyle appeal, such as North Norfolk and The Broads, higher-value properties may begin to emerge from a quieter period during 2025. There has also been a modest re-emergence of second-home buyers following the initial impact of higher stamp duty and double Council Tax on second homes. In summary, there are early but encouraging signs pointing towards a more settled and confident Q1 2026.
Ian Harris MNAEA MARLA
Sales – Customer Services Manager
Conclusion
Overall, the market remains cautious, but it no longer feels stuck. Activity is still muted across both sales and lettings, yet confidence is improving and expectations for 2026 are more positive than they’ve been for quite some time. While challenges remain, particularly around property supply, the direction of travel is clearer, and the foundations for a steadier period ahead are beginning to take shape nicely.
Based on the latest RICS UK Residential Market Survey – December 2025
