RICS: housing sales outlook weakest since July 2023 as mortgage rates rise

Surveyors' expectations for UK housing sales fell in October to their weakest since July 2023, the Royal Institution of Chartered Surveyors (RICS) said on 12 November, as renewed rises in mortgage rates held back buyers.

The October RICS UK Residential Market Survey put the net balance for new buyer enquiries at -24%, unchanged from September, with almost every part of the UK reporting falling or flat demand. The agreed sales balance dropped to -24% from -18%, its weakest reading in three months.

Looking further ahead, the 12-month sales expectations balance fell to -17%, which RICS said was the most pessimistic reading since July 2023. Three-month expectations were also negative at -11%.

Tarrant Parsons, RICS Head of Market Research and Analysis, said: "Home buyer demand remains subdued, and respondents are bracing for a weaker year ahead for sales given the persistent macroeconomic challenges being faced."

Prices and supply

The headline house price balance fell to -36% from -34%, a second consecutive monthly decline after what RICS described as signs of stabilisation over the summer. Its August survey, published on 10 September, had reported the price balance edging up to -28% from -29% in July.

London, East Anglia, the West Midlands and the South East recorded weaker price trends than the national average, RICS said. Prices continued to rise firmly in Northern Ireland, with modest growth in Scotland and the North West of England.

Respondents also cut their price forecasts. The 12-month price expectations balance fell to -17% from zero in September, with separate percentage estimates pointing to a fall of about 1%.

Supply weakened at the same time. New instructions slipped to a net balance of -8% from +6%, a reading RICS's September survey had described as the first positive figure since mid-2025. Market appraisals fell to -34%, the lowest since November 2025.

October 2026 indicator	Net balance
New buyer enquiries	-24%
Agreed sales	-24%
12-month sales expectations	-17%
Headline house prices	-36%
New instructions	-8%
Market appraisals	-34%

Lettings

In the rental market, the quarterly seasonally adjusted measure of tenant demand rose to +7% from -1%, while landlord instructions registered -30%. Expectations for rent growth over the next three months climbed to +41% from +29%, the strongest since early 2024.

Separately, the Office for National Statistics (ONS) said on 21 October that average UK monthly private rent rose 3.8% to £1,406 in the 12 months to September 2026. Average UK house prices rose 0.9% to £273,000 in the 12 months to August, with London the weakest English region at -2.2%. Wales recorded growth of 3.1% to £216,000 and Scotland 2.9% to £198,000.

Rates and inflation

The survey follows the Bank of England's decision, at a Monetary Policy Committee meeting ending on 4 November, to raise Bank Rate by 0.25 percentage points to 4%. The vote was 8-1.

The Bank said UK CPI inflation rose to 3.5% in September and is now expected to reach around 5% by the middle of next year, with global energy prices continuing to rise from an already elevated level. It added that monetary policy is not on a pre-set path.

Parsons said that with inflation projected to approach 5% next year, mortgage rates were likely to stay elevated for longer and continue to weigh on the market. In October, commenting on the September survey, he had said a renewed rise in interest rate expectations had created a fresh headwind for the housing market.

Housebuilder workloads

The findings land alongside RICS's Q3 2026 UK Construction Monitor, published on 5 November, which showed the headline workloads net balance falling to -7% from -4% in Q2, a sixth consecutive negative quarter.

Private housing was the weakest sector, with its workloads balance dropping to -18% from -12%. Construction respondents' credit conditions balance for the next three months fell to -36% from -21%, and the 12-month outlook fell to -32% from -13%.

Simon Rubinsohn, RICS Chief Economist, said: "RICS data continues to show the financial pressures on housebuilders as the key factor holding back development".

RICS says the Residential Market Survey is used by the government, the Bank of England and the IMF as an indicator of current and future conditions in sales and lettings. The survey is open for about two weeks towards the end of each month.