The UK housing market continued to lose momentum in October as uncertainty ahead of the Autumn Budget weighed heavily on buyer sentiment, according to the latest RICS UK Residential Market Survey.
The survey shows a broad-based cooling in activity, with buyer demand, sales and new instructions all falling further into negative territory.
Respondents cited growing anxiety over potential tax rises as the key factor behind the slowdown.
New buyer enquiries fell to a net balance of –24%, down from –21% in September and marking the weakest reading since April.
REGIONAL OUTLOOK
The decline was seen across all regions, as households delayed decisions pending greater clarity on fiscal policy.
Agreed sales also softened, slipping from –17% to –24%, while new vendor instructions registered a third consecutive negative reading at –20% – the lowest since 2021. Appraisal activity, an indicator of future supply, dropped to –37%, suggesting that fewer homeowners are preparing to list their properties.
DOWNWARD PRICE PRESSURES
Price pressures remain downward, with the national house price balance holding at –19%. London, the South East and East Anglia are seeing the sharpest declines.
Over the next three months, prices are expected to ease further, though 12-month expectations have turned positive, with a net balance of +16% of surveyors predicting growth in 2026 once policy direction stabilises.
REGULATORY IMPACT
In the rental market, tenant demand flattened (–4%), while landlord instructions fell sharply (–33 per cent), the weakest since April 2020. Although rents are still forecast to rise modestly, expectations have cooled amid concern over the Renters’ Rights Act and potential tax changes affecting landlords.
Across all regions, surveyors report a “holding pattern” as the market waits for clarity from the Treasury. Agents said activity above £1 million has been particularly affected by fears of changes to stamp duty, capital gains and inheritance tax.
OCTOBER WEAKNESS
Tarrant Parsons, Head of Market Research and Analysis at RICS, says: “The housing market continued to show weakness in October, with activity levels drifting lower amid a lack of buyer confidence.
“Ongoing uncertainty surrounding potential measures in the upcoming Budget are thought to be compounding the cautious mood among both buyers and sellers, while above target inflation and rising unemployment are also a negative for the market.”
CRUCIAL MOMENT
And he adds: “The coming months will be crucial in assessing how the market responds to the Budget, which could prove a turning point in either direction. Greater clarity over housing taxation policy may help stabilise sentiment, but if the measures announced add further pressure to activity, they risk deepening the current slowdown.”
The report suggests the market is likely to remain subdued through the end of the year, with any meaningful recovery deferred until early 2026 once the impact of the Budget becomes clearer and seasonal conditions improve.
INTENSE SPECULATION
Tom Bill, head of UK residential research at Knight Frank, says: “By the time the Budget arrives, the housing market will have endured three months of intense speculation around property taxes.
“Unless there is a pressing need to move, some buyers and sellers have understandably hit the pause button.
“While there will be clarity after 26 November, the wide range of tax rises on the table are likely to dent sentiment and put downwards pressure on house prices.”
