The UK housing market remained subdued in May, but green shoots of stability are emerging, according to the latest RICS UK Residential Market Survey.
Buyer demand and agreed sales both struggled to gain traction last month. A net balance of -26% of respondents reported a fall in new buyer enquiries, marking the fifth straight month of decline.
While still negative, it represents a slight improvement on April’s -32%. Sales volumes showed similar trends, with a net balance of -28% for agreed sales, little changed from -30% the previous month.
However, short-term sentiment appears to be softening. Sales expectations over the next three months improved to -5%, from -13% in April, suggesting activity may be nearing a floor. Looking 12 months ahead, optimism is growing, with a net balance of +25% of respondents anticipating higher sales—the most positive reading since February.
SUPPLY SIDE BRIGHTER
On the supply side, the picture is brighter. New sales instructions rose for the eleventh consecutive month, with a net balance of +7%, and market appraisals also remained strong, up +19% year-on-year.
House prices, meanwhile, are broadly flat. The national net balance slipped to -8%, the weakest reading since July 2024, and a notable decline from December’s +25%. Regionally, the picture varies: East Anglia (-34%) and the South West (-31%) recorded sharp declines, while Northern Ireland bucked the trend with a robust +92%.
Price expectations remain slightly negative in the short term, at -12%, though this is a marked improvement from -26% in March. Longer-term sentiment has eased, with 34% of respondents expecting prices to rise over the next year, down from 39% in April.
BOTTOM OF THE MARKET
Jeremy Leaf, north London estate agent and former RICS residential chairman, says: “There seems little doubt we’re seeing a ‘bottom’ to the market. Activity dropped after the stamp duty holiday ended but is now adjusting. Buyers are firmly in control, negotiating hard and taking their time, particularly on flats.”
In the lettings sector, tenant demand strengthened in May, with a net balance of +22% – the highest since September 2024. Meanwhile, landlord instructions continued to fall (-34%), fuelling expectations of rising rents. A net balance of +43% of respondents anticipate rental increases in the coming months, the strongest result since October 2023.
Leaf adds: “Listings have declined gradually, helping support rents. But affordability remains a ceiling – especially for flats.”
