The latest RICS UK Residential Market Survey for November 2025, reveals a subdued property market following the Government’s Autumn Budget, with metrics on buyer demand and sales volumes remaining firmly in negative territory.
Forward-looking indicators are also yet to suggest any meaningful near-term improvement in the property market following the Budget, with agents predicting a revival in Spring 2026. Survey respondents highlighted the impact of pre-Budget uncertainty and media ‘leaks’ on the market, but also expressed relief that the High Value Council Tax Surcharge was limited to properties above £2m.
New buyer enquiries in November recorded a net balance of -32% down from -24% in October, marking the weakest reading since late 2023. For agreed sales, the latest net balance of -23% is virtually unchanged from last month’s -24%, signalling a clear downward pattern in sales activity.
Looking ahead, the near-term sales expectations series posted a net balance of -6%, slightly weaker than the previous -3% but still consistent with a largely flat outlook for sales for the coming three months. Over the year ahead, however, a net balance of +15% of respondents anticipate sales volumes will pick up, a more positive result than the +7% recorded last month.
The headline net balance for new instructions was -19%, like the previous reading of -20%, indicating a continued slowdown in the flow of properties being listed for sale.
Respondents also increasingly report that the number of market appraisals being undertaken is running below levels seen 12 months ago, with the net balance slipping to -40% (falling further into negative territory for the fourth consecutive month). This suggests the pipeline for new instructions is likely to remain subdued in the near term.
Survey feedback continues to point to a gentle decline in house prices at the aggregate level, posting a net balance of -16% in November. However, the net balance in the capital dropped to -44%, now more negative than any other part of the UK, in part due to the introduction of the High Valuation Council Tax Surcharge. In contrast, respondents in both Northern Ireland and Scotland continue to cite an upward trend in house prices.
Near-term price expectations were little changed in November, with a national net balance of -15% registered (-12% previously). The 12-month expectations series moved slightly higher, with a net balance of +24% anticipating house prices will resume an upward trajectory over the coming year (the strongest reading since June).
Tenant demand cools as landlords face new income taxes
In the lettings market, the net balance for landlord instructions remains negative at -39%, with respondents pointing to a new income tax on property announced in the Budget as a factor that could further reduce new landlord instructions.
The monthly tenant demand indicator fell to a net balance of -22%, the weakest reading since April 2020. While some of this softness likely reflects seasonality (the monthly lettings data is not seasonally adjusted), there appears to be a broader cooling in tenant demand.
Near-term expectations for rental prices stand at a net balance of +6%, pointing to only marginal increases over the next three months (the flattest reading since the early stages of the pandemic). Nevertheless, on a 12-month horizon, respondents project a +2.5% rise in rents, only slightly below the roughly 3% average expected looking back over the past six months.
The report indicates that the market is likely to remain subdued until early 2026, when seasonal conditions improve.
RICS chief economist, Simon Rubinsohn, says: “The housing market has been struggling for momentum for several months, and the recent Budget announcements are unlikely to materially shift that picture. The ending of Budget related uncertainty is welcome, but the fundamental challenges of affordability and elevated borrowing costs will in all probability keep activity subdued in the near term. That said, the 12-month outlook has brightened somewhat, likely reflecting a growing sense that the Bank of England may have a little more scope to reduce interest rates than seemed plausible only a short while ago.
“Meanwhile in the lettings market, although tenant demand does appear to be softening the lack of stock is keeping rental expectations elevated and the additional tax levied on landlords in the Budget will likely exacerbate this trend.”
Commenting on the negative net balance of -44%, with regards to surveyors house price expectations for London, James Perris at De Villiers in London, stated: “The unusual run up to the budget certainly paused the market with little buying activity. The further tax on high end property will do nothing to bolster a sector of the market successive governments have damaged.”
However, Marcus Goodwille at Savills in Prime London, commented: “The introduction of an annual tax surcharge for properties worth over £2m, at levels somewhat lower than many will have feared, is probably the ‘least worst’ outcome for owners of prime property. This is likely to underpin a short term pick up in market activity.”
Emma Cox, MD of Real Estate at Shawbrook, commented: “A decline in buying activity and cooling tenant demand could pose challenges for landlords heading into the New Year.
“With little in the way of incentives or much-needed support for first-time buyers in the recent Budget, this looks set to continue as we close out 2025. As a result, professional landlords will likely turn to other, higher yielding asset classes such as HMOs and semi-commercial property, a trend we have seen throughout this year, in order to remain profitable in light of any headwinds. While the landscape appears uncertain in the short-term, weakening house prices and favourable mortgage rates may encourage professional landlords to add to their portfolios.”
