Demand from property buyers declined in March, with house prices flattening in most areas of the UK, according to the latest UK Residential survey from the Royal Institution of Chartered Surveyors (RICS).
New buyer demand sentiment fell sharply, the monthly sentiment survey found, marking the weakest demand seen since September 2023. This is likely to be down to stamp duty changes which came into effect on 1st April, which have increased buying costs. Agreed sales also dipped lower in March, with respondents expecting sales to continue to fall over the next three months.
Simon Rubinsohn, RICS chief economist, said: “The expiry of the stamp duty break was always going to lead to a pause in activity in the sales market. However, the latest results, and indeed the anecdotal remarks from respondents to the survey, suggest that the shift in sentiment has been aggravated by the slew of negative macro newsflow over the past few weeks.”
However, longer-term expectations are more upbeat, with 11% of survey participants expecting sales volumes to rise over the next 12 months.
The outlook is also positive for landlords, with contributors reporting the first increase in lettings demand since October last year. A net balance of 20% of respondents reported an increase in tenant demand, with 31% expecting to see rental prices moving upwards over the next three months.
However, the newly imposed global tariffs mean that there is plenty of uncertainty ahead. “Looking forward, the impact on the market will in no small part depend on how the economy is affected by the emerging trade war and the response of the Bank of England to the shifting environment,” said Mr Rubinsohn.
A flatter trend inhouse prices is emerging, although the RICS survey showed that Scotland and Northern Ireland are “more resilient” to downward price pressures than other regions.
This is reflected inHalifax’s latest House Price Index, which shows thatproperty prices fell by 0.5% in March, bringing the average house price in theUK to £296,699. Annual house price growth remained at 2.8% in the year toMarch, unchanged from February.
Amanda Bryden, head of mortgages at Halifax, said: “House prices rose in January as buyers rushed to beat the March stamp duty deadline. However, with those deals now completing, demand is returning to normal and new applications slowing.
“Our customers completed more house sales in March than in January and February combined, including the busiest single day on record. Following this burst of activity, house prices, which remain near record highs, unsurprisingly fell back last month.”
The bank expects a modest increase in prices over the year, however, helped by improving mortgage affordability, with several lenders having already trimmed rates following Trump’s tariff announcement.
