‘Early signs’ that housing market conditions may be improving seen by surveyors

The housing market showed “early signs” of turning a corner in January, according to surveyors.

The Royal Institution of Chartered Surveyors (Rics) said several results of its latest survey of property professionals were the least negative in months.

A net balance of 15% of professionals reported a fall in new buyer inquiries, rather than a rise, in January.

While this was still a negative reading, it was an improvement compared with the 21% who reported a fall in new buyer inquiries in December and 29% who saw this in November.

The latest survey indicates that the downward pressure on buyer demand is easing, the report said.

The volume of agreed sales followed a similar trend, with a net balance of 9% seeing a fall in sales agreed, which was the least negative reading since June last year.

House price falls also appear to be stabilising.

A net balance of 10% of professionals reported house prices falling in January, which was an improvement compared with a recent low of 19% seeing house price falls in October 2025.

Although momentum remains weak overall, the consistent improvement over recent months suggests a potential turning point is emerging, Rics said.

Price growth remains strongest in Scotland and Northern Ireland, with upward trends also reported in northern England, the report said.

By contrast, London, the South East, South West and East Anglia continue to lag behind, reflecting ongoing affordability challenges, but conditions in these areas have also improved modestly, according to Rics.

A net balance of 4% of professionals expect home sales to increase in the next three months.

But looking further ahead, a bigger balance of 35% of professionals expect home sales to rise in the next year – the strongest reading since December 2024.

Price expectations followed a similar pattern, with a net balance of 43% of professionals anticipating higher house prices over the year ahead, marking the most positive outlook since February 2025 and following increases in each of the past five reports from Rics.

In the lettings market, tenant demand edged higher in the three months to January, ending two quarters in a row of flat or negative readings.

With the supply of rental homes remaining constrained, rental prices are expected to continue rising, Rics said.

Rics chief economist Simon Rubinsohn said: “There are early signs that market conditions may be improving after a challenging period, although activity levels are still subdued, meaning any recovery is likely to be gradual.

“While the strengthening 12-month outlook is encouraging, near-term expectations remain relatively soft, reflecting ongoing economic uncertainty.

“Whether this tentative improvement develops into sustained momentum will depend heavily on the trajectory of mortgage rates and broader macro confidence over the coming months.”

The Rics report quoted a Huddersfield-based property professional seeing a “good start to the year with more activity particularly at the entry level and mid-market sectors”.

Meanwhile, a Birmingham-based professional observed “a very mixed month in January, with some areas showing great improvement with lots of new instructions and sales and other areas showing much less activity”.

A Dorset-based professional said: “It is typically quiet in January but we have experienced a lot of activity.

“Sellers who have put their plans on hold are now motivated and we expect good stock to come to market in the spring.”

A Cardiff-based professional observed sellers are “amenable to considering offers from buyers able to proceed”.

And a Glasgow-based professional said: “A stable but growing projection for the Scottish housing market has been made for 2026.”