The June Residential Market Survey from RICS points to only tentative signs of improvement, despite the recent easing in global geopolitical tensions.
Anecdotal remarks from respondents suggest that domestic political uncertainty is emerging as another headwind for the market. Overall, activity indicators remain subdued, although the pace of deterioration appears to be moderating.
While the near-term outlook for sales volumes remains relatively soft, sentiment is less downbeat than in recent months, suggesting that the housing market may be moving towards a more stable phase.
Looking at new buyer enquiries, the headline net balance of -29% this month is marginally less negative than the -34% readings recorded in each of the previous two surveys. June’s figure represents the least downbeat result since February, although it still points to relatively weak buyer demand for the time being.
For agreed sales, this measure also turned marginally less negative, posting a net balance of -32% compared with -35% previously. Nevertheless, the latest reading remains indicative of subdued market momentum. Looking ahead, near-term sales expectations registered a net balance of -16%, improving from a recent low of -34% in March. As such, respondents appear to anticipate a moderation in recent weakness rather than an outright turnaround in market conditions over the next three months. Looking further ahead, feedback from respondents points to a broadly flat trend in sales volumes over the next twelve months.
Turning to supply, the new instructions to sell indicator fell further into negative territory, posting a net balance of -23%, down from -10% previously. This represents the weakest reading for the measure in more than a year, signalling a clear contraction in the flow of fresh listings coming onto the market.
A similar trend is evident in the market appraisals series, where the net balance slipped to -22%. Taken together, these results suggest that the supply pipeline is beginning to thin, potentially limiting the volume of new stock entering the market in the months ahead.
For house prices, the latest aggregate net balance came in at -33%, broadly in line with the readings of -35% and -34% recorded in April and May respectively. As such, while the indicator continues to point to modest downward pressure on prices at the national level, the trend appears to be stabilising rather than deteriorating further. At the regional level, the South East and South West of England continue to exhibit noticeably more negative net balances than the UK average. By contrast, respondents in Northern Ireland and, to a lesser extent, Scotland continue to report that house prices are following an upward trajectory.
Looking ahead, near-term price expectations at the aggregate level remain somewhat negative, although less so than in the previous survey. Further ahead, the twelve-month outlook remains modestly positive, with a net balance of +8% of respondents expecting house prices to rise over the year ahead, up slightly from +6% in the previous survey.
Jeremy Leaf, north London estate agent and a former RICS residential chairman, commented: “Ongoing worries about the conflict in Iran and its impact on the economy – especially mortgage rates and inflation – as well as domestic political uncertainty means home buying and selling is being pushed further down the ‘to-do’ list.
“Nevertheless, those who need rather than want to move are negotiating hard and trying to anticipate the market’s direction of travel.
“The net result is prices and activity are holding up better than we dared hope although we are not expecting a significant summer rebound, bearing in mind these distractions are likely to continue for a few more months at least.”
Rachel Springall, finance expert at Moneyfactscompare, added: “The supply of homes coming onto the market is beginning to thin, with both new instructions and market appraisals moving deeper into negative territory. The recent volatility in mortgage pricing and wider geopolitical uncertainty may have prompted some homeowners to pause their plans to sell until the outlook becomes clearer. Fewer properties coming onto the market could restrict the overall supply of homes in the months ahead. Overall, market sentiment remains subdued, although downward pressure on house prices appears to be easing.
"New buyer enquiries remain weak, yet buyer sentiment has slightly improved, recording its least negative result since February. Falling mortgage rates could encourage prospective buyers, but affordability pressures and wider economic uncertainty can create caution, with some sitting on the fence until rates fall further. Those seeking a new deal are looking at repayments of £1,538 per month, based on a typical two-year fixed mortgage of 5.52% on a loan of £250,000, with a term of 25 years. This is a difference of around £760 over the course of 12 months, compared to the average rate of 5.09% back in July 2025."
