The UK residential property market is showing "tentative signs that it may be turning a corner", according to the latest RICS survey for January.
Whilst overall activity remains subdued, several key indicators have continued to improve, recording their least negative readings in months. Survey respondents are increasingly confident that sales activity will strengthen as the year progresses, even as near-term conditions remain challenging.
New buyer enquiries improved again in January, signalling easing downward pressure on demand. Agreed sales followed a similar trend, with the latest net balance of -9%, the least negative reading since June 2025.
House prices at a national level appear to be stabilising. The net balance for prices over the past three months stood at -10%, improving steadily from a low of -19% in October 2025. Although momentum remains weak overall, the consistent improvement over recent months suggests a potential turning point is emerging.
Regional performance continues to diverge. Price growth remains strongest in Scotland and Northern Ireland, with upward trends also reported in the North West and North of England. In contrast, London, the South East, South West and East Anglia continue to lag behind the national average reflecting ongoing affordability challenges, though conditions in these areas have also improved modestly.
Looking ahead, sentiment around the medium-term outlook has strengthened notably. While expectations for sales over the next three months eased, reflecting short-term caution, optimism over the next twelve months surged to +35%, the strongest reading since December 2024. Price expectations show a similar pattern, with +43% of respondents anticipating higher prices over the year ahead, the most positive outlook since February 2025.
Overall, RICS says the January survey points to a housing market that may be entering the early stages of recovery. While affordability pressures, economic uncertainty and regional disparities persist, improving sentiment suggests conditions could strengthen as 2026 unfolds.
RICS chief economist, Simon Rubinsohn, said: “There are early signs that market conditions may be improving after a challenging period, although activity levels are still subdued, meaning any recovery is likely to be gradual. While the strengthening twelve-month outlook is encouraging, near-term expectations remain relatively soft, reflecting ongoing economic uncertainty. Whether this tentative improvement develops into sustained momentum will depend heavily on the trajectory of mortgage rates and broader macro confidence over the coming months.”
