RICS: UK Housing Market Stagnant as Buyer Demand Remains Flat in July 2026

Market Sentiment Remains Subdued Amid External Pressures

The UK housing market showed virtually no momentum in July 2026, with buyer demand and agreed sales remaining broadly flat compared with the previous month, according to the latest Royal Institution of Chartered Surveyors (RICS) UK Residential Market Survey.

New buyer enquiries recorded a net balance of -28% in July, unchanged from June. Whilst the reading remains firmly in negative territory, it represents a notable recovery from the recent low of -41% recorded in March, suggesting that the pace of demand deterioration has begun to ease. Similarly, agreed sales stood at a net balance of -30%, also flat month-on-month and slightly less negative than the -37% registered in April.

Simon Rubinsohn, chief economist at RICS, highlighted the broader context weighing on the market: "The housing market remains subdued, and whilst that is not unusual over the summer months, it is clear from the RICS seasonally adjusted data that the combination of geopolitics, the domestic political climate and the cost of mortgage finance are continuing to weigh on sentiment."

Regional Disparities and Price Expectations

Regional performance remains mixed, with London, the South East and South West reporting more negative price balances than the national average. Northern Ireland continues to buck the trend with rising prices, whilst Scotland's previously sustained growth appears to be levelling off.

Forward-looking price expectations paint a concerning picture. Three-month price expectations stand at a net balance of -31%, though twelve-month expectations are slightly more positive at +4%. However, London has emerged as a particular area of concern, with year-ahead price expectations falling sharply to -23% from -10% in the prior survey.

Rubinsohn further noted that the weak forward-looking metrics are unlikely to encourage housebuilders to accelerate activity: "The forward-looking metrics also remain downbeat, which is not the sort of climate likely to encourage housebuilders to step on the gas on existing sites or in land-buying, as highlighted in recent trading statements from developers."

Summer Lull Extends Beyond Typical Seasonality

Lenders report that the traditional summer pick-up in activity has failed to materialise as expected. Louise Apollonio, Sales and Distribution Director for Retail Mortgages at Shawbrook, commented: "We're yet to see the usual summer pick-up, with both new buyer enquiries and agreed sales remaining fairly flat. Normally, we'd expect sales to rise as people look to complete their moves ahead of the new school year, but extreme weather, uncertainty following the Government reshuffle and the wider geopolitical picture may all be causing buyers to hold off."

Apolonio added that buyer confidence remains the critical factor: "Until buyers feel the worst of the cost-of-living squeeze is behind them, we're unlikely to see a significant shift in activity, particularly with some buyers and sellers likely to wait and see what comes from the Budget on October 28th."

Selective Market Activity and Negotiation Opportunities

Tom Bill, head of UK residential research at Knight Frank, identified a divergence emerging between well-priced and overvalued properties. "The RICS survey does show that competitively priced homes are selling, whilst those with higher expectations are taking longer to move. For buyers, that could create some room for negotiation."

Bill highlighted persistent headwinds including upwards pressure on mortgage rates and broader tax uncertainty. "The backdrop is less volatile than last summer but upwards pressure on mortgage rates and tax uncertainty are the familiar causes of hesitation among buyers, which means demand is improving but from a low base."

With geopolitical tensions continuing to impact borrowing costs and government budget uncertainty extending to late October, the market appears poised for a prolonged period of caution. Investors seeking to identify opportunities amid the current stagnation may benefit from utilising specialist tools to spot planning alert tool and deal finder opportunities where motivated sellers are pricing properties competitively.

Source: Property Industry Eye.