UK housing market shows early signs of recovery, RICS says

RICS reported moderation in declines for new buyer enquiries, agreed sales and short-term price falls in January, indicating early signs of recovery. Regional performance remains uneven and lettings supply is constrained, with rental prices expected to rise.

The UK housing market is showing early signs of recovery, though activity remains subdued and regional differences are widening. The Royal Institution of Chartered Surveyors (RICS) said recent readings point to a moderation in the pace of decline across several measures in its January residential survey. Surveyors reported fewer falls in buyer enquiries and agreed sales compared with recent months. RICS cautioned that the development of sustained momentum will depend on mortgage rates and broader economic confidence. Key findings: - A net balance of 15% of professionals reported a fall in new buyer enquiries in January, still negative but improved from December's 21% and November's 29%. - A net balance of 9% of respondents reported a fall in agreed sales, the least negative reading since June 2025. - A net balance of 10% reported prices falling over the past three months, an improvement from a 19% reading in October 2025. - Short-term expectations are cautious: a net balance of 4% expect sales to increase over the next three months, while 35% anticipate higher sales over a 12-month horizon. - A net balance of 43% of respondents expect house prices to rise over the coming year, the most positive outlook since February 2025. - In the lettings market tenant demand edged higher, landlord instructions remain negative and supply is constrained, and rental prices are reported as likely to continue rising in the near term. Summary: The RICS survey shows moderation in declines across buyer enquiries, agreed sales and recent price falls, suggesting a tentative improvement in market conditions. Regional trends remain uneven, with stronger readings in Scotland and Northern Ireland and weaker performance in London and parts of southern England. Lettings show rising tenant demand alongside constrained supply. Whether this tentative improvement becomes sustained depends on the trajectory of mortgage rates and broader macroeconomic confidence.