Britain's housing market displayed tentative signs of stabilization in June, according to the Royal Institution of Chartered Surveyors (RICS) survey released on Thursday. The RICS headline house price balance stood at -33% in June, broadly unchanged from May's revised reading of -34%, indicating that more surveyors continued to report falling house prices than rising ones. However, the pace of decline eased marginally, suggesting the market may be finding a floor after months of weakness.
Demand from prospective homebuyers improved modestly during June, with new buyer enquiries rising to -29% from -34% in each of the previous two months. This marked the least negative reading since February and hinted at a gradual return of market interest. Expectations for near-term home sales also improved significantly, with the balance measuring sales expectations over the next three months recovering to -16%, substantially better than March's low of -34%. Looking further ahead, respondents were broadly neutral on sales over the next 12 months, with the indicator edging into positive territory at +1%.
The rental market remained considerably tighter than the sales market, with tenant demand strengthening to +18%, its highest level since May 2025. The supply of rental properties remained constrained as landlord instructions stayed negative at -18%. Survey participants expect rents to rise by around 2.5% over the next year as demand continues to outpace available housing stock. House price expectations over the coming year also strengthened slightly, rising to +8% from +6%, suggesting surveyors expect modest price gains despite current market weakness.
RICS noted that uncertainty surrounding inflation and future borrowing costs continues to dampen confidence, even after the recent decline in oil prices offered some relief. The organization also highlighted that the Bank of England's decision to leave interest rates unchanged has done little to dispel concerns over the future path of monetary policy. RICS believes housing market activity is likely to remain subdued in the near term until there is greater clarity over both the political landscape and the outlook for interest rates. While some indicators have improved from earlier lows, survey responses suggest buyers and sellers remain cautious as they wait for stronger economic signals before committing to property transactions.
