UK house prices expected to rise but market continues to face uncertainty

Yahoo

10-07-2025

UK house prices are expected to rise over the coming year, according to a survey of professionals in the sector, though the market continues to face uncertainty.
The Royal Institution of Chartered Surveyors (RICS) June residential market survey, released on Thursday, found that respondents expected a slightly negative trend in house prices to continue in the short term.
However, over the next 12 months, a net balance of +24% expected house prices to rise.
The latest Halifax house price index, published on Monday, showed that the average cost of a UK home was little changed month-on-month in June. This stagnation in prices, with the average UK home in June costing £296,665, followed a 0.3% dip in May.
As for the lettings market, the RICS survey found that a net balance of +24% of respondents expected rents to rise in the next three months, though this was lower than the +43% who thought this last month. Tenant demand remained largely flat in June, although the survey indicated that landlords continued to leave the sector.
Overall, the survey's findings suggested that the UK house sales market showed signs of stabilisation. Its indicator of buyer demand turned positive for the first time since December 2024. It found the net balance for new buyer enquiries rose to +3% in June, which marked a noticeable improvement on the -22% reported in May. However, RICS said that this figure still indicated a period of stabilisation, rather than strong recovery.
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Meanwhile, the national net balance for agreed sales improved significantly from previous months, decreasing to -3% from previous readings of -25% and -28% in earlier surveys. However, RICS said that sales momentum is expected to remain subdued in the near term, despite this improvement.
Expectations for sales volumes in the near term turned marginally positive in the June survey, with a net balance of +6% compared to -2% in May. However, RICS found that respondents foresee a broadly flat landscape for sales volumes over the next year, with a net balance of +5%.
The survey found that new instructions to sell had declined slightly, with the net balance in June dipping to +3% from +7% in May. While RICS said that this signalled a slowdown in the flow of new listings onto the market, 16% of respondents reported an increase in market appraisals compared to the same period last year, suggesting that supply levels remained relatively healthy.
Tarrant Parsons, head of market research and analysis for RICS, said: "The UK residential market appears to be entering a more settled phase, with demand showing signs of stabilising following a period of volatility. The earlier distortion caused by transactions being brought forward ahead of the stamp duty changes now appears to have largely dissipated, allowing underlying trends to re-emerge."
He added: "Encouragingly, near-term sales expectations have begun to edge higher, pointing to a modest shift in sentiment. That said, confidence in the market remains somewhat delicate, with economic uncertainty at both the domestic and global level still seen as a potential headwind."
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