The Royal Institution of Chartered Surveyors (RICS) UK Residential Market Survey for May 2023 has revealed that while some positive trends have emerged, expectations about further interest rate rises may introduce renewed downward pressure on the market in the months ahead.

Regarding demand, the net headline balance for new buyer enquiries was -18% (net balance) in May. Although this indicates a subdued trend in buyer demand, the latest reading is up from a net balance of -34% in April and represents the least negative figure over the past 12 months. This trend is consistent across the country, with a less downbeat pessimistic trend for new buyers reported in every region when compared to January figures.

Meanwhile, the agreed sales indicator returned a net balance of -7% this month, noticeably less downbeat than figures of -29% and -18% seen back in March and April respectively. Similarly, the latest net balance for near-term sales expectations was recorded at -7%, representing the least pessimistic view from respondents since May 2022 (up from -17% in April).

Survey participants said that new instructions rose by a net balance of +14% during May. Consequently, this breaks a run of 13 successive negative monthly readings and marks the strongest reading for the new listings metric since March 2021.

However, a net balance of -30% of respondents cited a further fall in national prices in May. Even so, this measure has turned less negative in each of the past three reports, having hit a recent low of -46% in February. Within this, the disaggregated data is now showing some noteworthy variations in house price trends across different parts of the UK. In London, for instance, the latest net balance of -3% indicates a mostly steady picture (up from -11% in April).