The residential property market has lost some momentum in September ahead of expected Bank of England interest rate rises, according to the Royal Institution of Chartered Surveyors (RICS).
Figures drawn from the latest UK Residential Market Survey by RICS showed buyer demand has remained “subdued” with new buyer enquiries falling in September. The latest sentiment from RICS respondents showed a fall in market confidence amongst surveyors and estate agent members marking the first month since March where the indicator has weakened.
Meanwhile agreed sales fell to less than the previous three-month average and expectations for sales over the coming three months “softened”, the survey suggested. Positively, the balance for new sales instructions moved to +6%, the first positive reading since mid-2025, although RICS respondents indicated that market appraisal activity remains below levels seen a year earlier.
RICS Head of Market Research and Analysis, Tarrant Parsons, said: “A renewed rise in interest rate expectations has created a fresh headwind for the housing market, with buyers becoming a little more cautious and sales activity losing some momentum this month. Even so, the latest results do not point to any significant shift in direction. Rather, they suggest the market may need to contend with a somewhat longer period of subdued activity as households adjust to the prospect of borrowing costs remaining higher than previously anticipated.”
The sentiment chimes with the latest Lloyds house price index in which Andrew Asaam, mortgages director at Lloyds said the evidence was the market was subdued. House prices remain “unchanged” said Lloyds, resilient “during a period of higher mortgage rates, which has been driven by changing expectations around the future path of Base Rate.”
He added: “That’s mirrored in wider economic data, with household spending holding up better than many expected despite energy and other cost pressures arising from the Middle East conflict.
“Whether that picture continues is likely to depend on how confident consumers feel that the latest cost‑of‑living pressures will prove temporary.
“For now, the housing market appears to be balancing buyer caution with continued underlying demand.”
Reacting to the figures, Nathan Emerson, CEO of Propertymark said fluctuation in domestic house prices is “unsurprising” following current global economic pressures, adding that the market will inevitably change as buyers and sellers’ decisions are influenced by wider economic conditions, base rates, inflation and consumer confidence.
Referring to the upcoming Autumn budget, he said: “Support for first-time buyers would be particularly welcome, given the ongoing challenges many face in saving for a deposit and meeting affordability requirements.
“At the same time, measures that encourage continued investment in housing will be important to ensure supply keeps pace with future demand and that the market remains resilient over the longer term.”
Iain McKenzie, CEO of The Guild of Property Professionals suggested that the autumn market “looks to be characterised by selective demand rather than a broad-based surge in activity”.
He added: “The key question now is whether inflationary pressures, particularly from energy, ease enough to allow interest rates and mortgage pricing to come back down. If they do, there is potential for some of the demand currently sitting on the sidelines to return and provide a stronger finish to the year.”
