Expectations for rental price increases over the next three months have risen to their strongest level since early 2024, according to the latest UK Residential Market Survey from the Royal Institution of Chartered Surveyors (RICS).
The survey found that the rental growth expectations indicator increased from +29% to +41%, reflecting growing pressure on rents.
This comes as tenant demand returned to modest growth in October, while the number of properties being offered by landlords continued to decline. Together, these trends are adding to expectations of further rental price increases.
On the quarterly, seasonally adjusted measure, tenant demand recorded a net balance of +7%, up from -1% in September. By contrast, landlord instructions remained negative at -30%, indicating that fewer rental properties were being made available.
Housing sales outlook falls to lowest level since July 2023
The outlook for the UK housing market has also weakened, with expectations for sales reaching their lowest point since July 2023. Higher mortgage rates are continuing to affect buyer demand and market confidence.
New buyer enquiries remained at a net balance of -24%, unchanged from September. Most areas of the UK reported either declining or flat demand.
Agreed sales also weakened, with the indicator falling from -18% to -24%. This represents its lowest reading in three months.
Looking further ahead, expectations for sales over the next 12 months dropped to -17%, marking the most negative outlook since July 2023. The outlook for the next three months was also negative, standing at -11%.
House prices continued to come under pressure. The headline price balance slipped from -34% to -36%, marking a second consecutive monthly decline after signs of stability over the summer.
London, East Anglia, the West Midlands and the South East recorded weaker price trends than the national average. However, property values continued to increase in Northern Ireland, while Scotland and the North West of England saw modest growth.
Expectations for house prices over the next 12 months also deteriorated, with the balance falling from zero to -17%. Separate percentage estimates suggest prices could experience a relatively modest decline of around 1%.
The supply of properties coming onto the sales market also weakened. New instructions fell from a net balance of +6% to -8%, while the market appraisals indicator dropped to -34%, its lowest level since November 2025.
These figures suggest that fewer new properties could enter the market over the coming months.
Higher mortgage rates continue to weigh on buyers
Tarrant Parsons, head of market research and analysis at RICS, said buyer demand remained subdued, with survey respondents expecting a weaker year ahead for property sales.
He pointed to ongoing economic uncertainty and the possibility of further interest rate increases as factors affecting market confidence.
The Bank of England has warned that monetary policy may need to become tighter if rising energy costs push up prices across the wider economy. With inflation forecast to approach 5% next year, mortgage rates could remain higher for longer, placing further pressure on the housing market.
Download NOW
4 Simple Steps To Becoming Wealthy Through Property