Market Survey: Despite subdued activity, tentative signs are emerging that the market may be turning a corner
The latest RICS UK Residential Survey results reveal that encouraging signs are beginning to emerge across the housing market. While activity levels remain measured, confidence is quietly improving and the latest indicators suggest the market may be starting to turn a corner after a more subdued period.
- Several indicators have become consistently less downbeat in recent months.
- House prices appear to have stabilised at a national level, although regional disparities are widening.
- Sentiment regarding the twelve-month sales outlook points towards a recovery.
Residential Sales
Based on the RICS UK Residential Market Survey data for January 2026, the latest report shows several key indicators becoming consistently less negative. New buyer enquiries remain below normal levels, coming in at -15%, but improving month on month. Agreed sales are following a similar path, with the latest reading of -9% marking the least negative position since mid-2025. The bottom line is that the market isn’t busy, but the mood is really improving.
The outlook for sales activity over the next three months is marginally positive, which points to a relatively flat run in the coming months. However, confidence strengthens when looking further ahead into 2026. Sentiment around the twelve-month sales outlook is looking very positive, with the industry expecting activity to pick up over the course of the year. If the market can sustain this, it points towards a gradual recovery rather than a sudden bounce in new activity.
Movement remains limited on the supply of new properties to the market. New instructions are relatively stable month on month, while market appraisal activity is only just behind last year’s pace. Sellers are not flooding the property market or pulling back sharply. For now, supply conditions feel stable.
House prices appear to have stabilised nationally. The ‘headline’ measure remains negative at -10%, but this has also steadily improved over the last few months, suggesting that downward pressure is starting to ease. However, regional differences are becoming more pronounced. Northern England continues to show firmer momentum, while the South East and East Anglia remain softer, but gradually improving.
Expectations still point to relatively flat pricing over the next three months, but looking further ahead, sentiment is upbeat. The industry is also expecting prices to move higher over the next year. If this slight confidence continues to build, 2026 could prove more stable than 2025.
Ian Harris, Customer Services Manager for Residential Sales, said:
“Overall, sales are slower at the start of 2026 , than in 2025. However, this does bear some consideration before we get too despondent. The acute and chronic speculation about what would be in the November 2025 Budget was damaging to the market, especially in regard to buyers with money, who had worked and saved hard to put them in a position to buy a second home or comfortable retirement property. Typical of the type of transaction which underpins the Norfolk Market, as it does many other “lifestyle” areas of the UK.
What we are now seeing is the return of some these types of buyer, although this activity takes a little time to gain traction in terms of agreed transactions with many starting “from scratch” in January.
Its been noticeable that there is improved activity from second home buyers and first time buyers. Improved confidence prompted by slightly lower interest rates, and encouraging economic statistics and commentary seem to be influential in this respect. Had the weather not been so bad at points during January and February, I suspect the market statistics would have been even more encouraging.
With stock levels fairly strong, agents are needing to work hard with buyers to stimulate desire and urgency by closely matching available properties closely to buyers requirements.”
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.
Steff Summer, Lettings Manager said:
“Tenant demand in the lettings market has increased, however supply remains constrained. Landlord instructions are also below typical levels, keeping availability tight. As a result, upward pressure on rents is expected to continue in the near term.”
Conclusion
Overall, the market remains cautious but no longer feels stuck. Activity remains subdued, but things are improving and forward-looking sentiment is strengthening. If this confidence continues to build, and supply remains steady, the months ahead may mark the early stages of a more balanced phase for both the sales and lettings markets
Based on the latest RICS UK Residential Market Survey – January 2026 (Released 17 Feb 2026)
