Lettings

The lettings market is now showing signs of life. Tenant demand rose in the latest quarter of 2025, with a net balance of +13%, ending a run of flat or negative readings. This increase is not overly dramatic, but it does suggest the market is regaining more momentum.

Landlord instructions still remain constrained, even though the pace of decline has eased. However, supply of new rental properties remains tight, and this imbalance continues to underpin expectations for rental growth. Nevertheless, rents are expected to rise in the near term, reflecting ongoing pressure rather than any sharp surge in demand.

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.

Conversely, prices in Northern Ireland and Scotland remain on an upward trajectory according to survey respondents, recording positive net balances of +64% and +29% respectively. While the recent picture for house prices has remained somewhat negative across much of the UK, it is particularly noteworthy that near-term price expectations stabilised during the latest survey round. Indeed, having been stuck in contractionary territory for the past two years, the three-month ahead price expectations series recorded a net balance of +5% in June.

This neutral reading implies that respondents now sense the decline in house prices has largely run its course. Moreover, at the twelve-month time horizon, a net balance of +41% of contributors expect to see an increase in house prices. 

Alongside this, the flow of sales instructions coming onto the market continues to rise, with the new listings indicator registering a net balance of +16% in May. As a result, the volume of fresh instructions coming onto agent’s books has now improved for six consecutive months. Painting a similarly positive picture for changes in supply on the second-hand market, a net balance of +17% of respondents report that the number of market appraisals undertaken of late is higher than a year ago (representing the fifth reading in expansionary territory for this metric). Looking at the most recent trend in house prices, the headline series retreated in May, posting a net balance of -17% compared to -7% in the previous iteration of the survey.

Consequently, having held broadly steady in both March and April, the latest reading (being the most negative return since January) suggests that house prices fell slightly during the month. That said, while prices pulled back to a certain degree in virtually all regions of England during the latest survey period, Scotland and Northern Ireland continue to see a very different picture, with prices remaining on an upward trajectory in both cases. With respect to the near-term outlook for prices at the national level, expectations suggest that some further downward pressure could be seen in the coming three-months, albeit the net balance of -12% is only very marginally negative. At a slightly longer timeframe however, contributors remain firmly of the view that house prices will move higher over the next twelve months. In fact, the latest net balance of +41% for the year-ahead price expectations indicator is the most elevated reading since April 2022 (up from +38% last time).

As such, this brings to an end a run of three consecutive positive monthly results beforehand, with the latest return indicative of a broadly flat trend. That said, the feedback around buyer demand is mixed at the regional level, with any loss of impetus mainly concentrated in London and Southern parts of England.

Meanwhile, the agreed sales metric did improve slightly in April, posting a net balance reading of +5% compared to -5% last month. Although the latest return does in fact mark the most positive reading since early 2021, it is consistent with only a marginal up-tick in monthly sales volumes.

With financial markets recently paring back expectations around the potential scale of monetary policy loosening this year, near-term sales expectations appear to have been adversely affected. Indeed, the net balance for sales expectations over the coming three months dipped to -1%, marking the weakest reading since October 2023 (and now signalling a more or less stagnant near-term picture). Nevertheless, respondents still foresee a stronger trend in sales activity coming through at the twelve-month horizon, even if expectations have turned a little more moderate (net balance +33% vs +46% last month).

Looking at the supply available on the market, a net balance of +23% of contributors noted an increase in the flow of new instructions during April. Significantly, this represents the most elevated figure for the new listings gauge since late 2020. Furthermore, average stock levels have now picked up to a three-year high, at 43 properties per branch. Going forward, the pipeline for new instructions appears solid, evidenced by a net balance of +20% of respondents reporting that market appraisals are up on an annual comparison.