UK housing demand fell to its weakest level in two years in November, according to surveyors, who expect the market to remain subdued into next year.
A monthly survey by the Royal Institution of Chartered Surveyors (RICS) found a net balance of 32% of surveyors reported a decline in new buyer inquiries, the worst reading since late 2023. Pre-Budget uncertainty and affordability pressures were seen as key factors.
Overall price expectations slightly improved, with the house price balance improving to a fourth month-high of -16, from -19 in October, outperforming consensus forecasts of -21.
The number of new instructions to sell and sales being agreed was also falling overall, with the new buyers enquiries balance falling sharply to -32, from -24 in October and the lowest since September 2023.
Price falls remain steepest in London, but Northern Ireland and Scotland continued to show upward pressure. Over the next year, 24% of professionals expect prices to rise, and 15% foresee an increase in sales activity.
RICS chief economist Simon Rubinsohn said: “The housing market has been struggling for momentum for several months, and the recent Budget announcements are unlikely to materially shift that picture.”
RICS said the market is likely to remain subdued until early 2026.
However, economist Elliott Jordan-Doak at Pantheon Macroeconomics said he sees "some positive signs for the housing market" in the RICS data.
"We think the market remains stable, if subdued. But sentiment should improve somewhat in the coming months now that the Budget has been passed and some of the rumoured worst-case property tax increases are off the table, giving homebuyers more certainty over policy."
He said the Chancellor’s new ‘mansion tax’ "will weigh on certain parts of the market, such as in the South-East, where homes are more expensive on average.
"But the activity data has remained solid in recent months, indicating that fundamental demand is holding firm.
"The Bank of England will also cut interest rates next week, improving affordability for homebuyers. So, we think there is room for buyer interest to pick up."