Consumer demand and agreed sales remained negative in May, but there were some signs that the market is beginning to stabilise, the latest index from the Royal Institution of Chartered Surveyors found.
New buyer inquiries recorded a total balance of -34% in May, unchanged from April, meaning a greater number of respondents reported a decrease in new inquiries than an increase.
Agreed sales were also unchanged from April, the overall balance of -37% and house price readings remained at -35% for the second month in a row.
Respondents in the South East and East Anglia reported weak price conditions, while Northern Ireland continued to see strong house price growth.
Looking ahead, short-term sentiment remained cautious, although short-term sales expectations improved slightly to 25%, compared to -32% and -34% in the previous two surveys.
Over 12 months, sales expectations remain positive, with a net balance of +2% expecting activity to improve.
Near-term house price expectations remained negative, with an overall balance of -45% expecting further declines over the next three months.
However, respondents were more optimistic over the coming year, with a net balance of +6% expecting prices to rise.
The rental market continued to experience an imbalance in demand
Employer demand increased, with the balance remaining +14% of respondents reporting growth, while landlord orders remained strongly negative at 28%.
As a result, employment expectations strengthened, rising to +36%, the highest reading since May 2025.
The survey also showed that transactions are taking longer, with the average time from listing to completion reaching 21.5 weeks – the longest since records began in 2017.
RICS head of market research and analysis Tarrant Parsons says: “The latest survey data suggests that the recent decline in activity may be starting to stabilise, with a few key indicators unchanged.
“However, since they live in a bad place, it would be premature to interpret this as the beginning of recovery.
“The fall in CPI inflation to 2.8% in April provided temporary relief, but the Bank of England noted that some inflationary pressures are likely to persist as energy costs continue to pass.
“Against this background, the prospect of continued price increases cannot be dismissed, and until there is greater clarity, market sentiment will remain fragile.”
Shawbrook Real Estate managing director Emma Cox says: “While it is too early to make any changes, the expected improvement in property sales is encouraging and suggests that confidence may be slowly returning to the market.
“The rental sector continues to tell a different story, as tenant demand and rental expectations increase.
“For landlords, that ongoing imbalance between supply and demand may continue to support rental growth in the coming months.”
Former RICS residential chairman Jeremy Leaf says: “Downward pressure remains on apartment prices mainly due to concerns about the long-term impact of the Middle East war on the cost of living.
“On the other hand, viewings are stable and the large number of items agreed remains the same although it is increasing as it becomes increasingly tricky to add urgency while the choice in a wide range of prices is abundant.”
In the recruitment industry he adds: “In our offices, the concern about affordability is what keeps the work manageable.
“Rents would probably have trended higher had it not been for the shortage of stock caused by property sales in the lead up to the introduction of the Tenants’ Rights Act.
“Demand remains strong, fueled in part by high housing costs that encourage renters to continue renting rather than trying to buy.”
