The latest RICS Residential Market Survey indicates a continued weakening in the UK housing market as of November, with falling buyer demand, reduced property listings, and sluggish sales activity. This trend follows the Autumn Budget, which appears to have dampened confidence among buyers and landlords alike, particularly due to new tax measures affecting property investment.

For landlords, these developments signal a challenging lettings market with tenant demand softening and rental growth expectations moderating. Understanding these shifts is essential for effective portfolio management and strategic planning in the coming months.

Housing Market Activity Declines Post-Budget

The RICS survey reports a further decline in housing market activity during November, with agents noting a drop in buyer enquiries and instructions to sell. The political uncertainty and speculation surrounding the Autumn Budget, including numerous leaks, contributed to households adopting a cautious stance, delaying decisions to buy or sell.

New buyer enquiries fell sharply, registering a net balance of -32%, a steeper decline than October’s -24% and the weakest level recorded in 2023. Similarly, agreed sales remained subdued at -23%, reflecting a persistent downbeat sales environment throughout the autumn months. The near-term sales outlook also worsened, falling to -6% from -3%.

Despite these short-term challenges, agents expressed a cautiously optimistic view for 2026, with a net balance of +15% anticipating an increase in sales volumes, up from +7% the previous month.

Supply Constraints and Price Softening

New property listings continued to fall, with a net balance of -19%, closely mirroring October’s -20%. Appraisal levels have declined for four consecutive months, suggesting a weakening supply pipeline as winter approaches. This reduced supply may influence market dynamics, potentially limiting options for buyers and affecting pricing strategies.

Nationally, prices continued to soften, with a net balance of -16%. London experienced a more pronounced decline, with prices dropping significantly at -44%. This regional disparity highlights ongoing challenges in the capital’s housing market compared to the broader UK.

Lettings Market Experiences Cooling Demand

The lettings sector is also showing signs of slowdown. Landlord instructions remain negative at -39%, with many respondents attributing this to the new income tax on property introduced in the Autumn Budget, which is perceived as a deterrent to investment. Tenant demand has cooled markedly, with the net balance falling to -22%, the weakest since April 2020.

Despite this, near-term rent price expectations remain slightly positive at +6%, indicating only marginal increases in rental values over the coming months and an anticipated 2.5% rise next year. This suggests that while demand is softening, rental prices are not expected to fall significantly in the short term.

Expert Insights on Market Outlook

Simon Rubinsohn, RICS Chief Economist, commented on the lettings market: “Although tenant demand does appear to be softening, the lack of stock is keeping rental expectations elevated and the additional tax levied on landlords in the Budget will likely exacerbate this trend.” He further noted that the housing market has struggled for momentum over recent months and that the Budget announcements are unlikely to change this substantially.

Rubinsohn added that while the end of Budget-related uncertainty is positive, fundamental issues such as affordability and high borrowing costs are expected to keep market activity subdued in the near term. However, he observed a somewhat brighter twelve-month outlook, possibly reflecting expectations that the Bank of England may have more room to reduce interest rates than previously anticipated.

Tom Bill, Head of UK Residential Research at Knight Frank, highlighted the impact of pre-Budget tax speculation on market sentiment: “The barrage of property tax speculation before the Budget unsurprisingly soured sentiment among buyers and sellers. Now there is clarity, we expect existing transactions to accelerate before Christmas, and activity should remain relatively strong in early 2026.”

Bill also pointed out that while falling interest rates could support demand, political uncertainty remains a significant risk, especially with upcoming local elections potentially influencing market confidence.

Implications for Landlords and Agents

For landlords and letting agents, the current market conditions suggest a need for careful management of rental portfolios amid cooling tenant demand and the impact of new taxation. Maintaining competitive rental pricing and managing void periods will be important strategies as the lettings market adjusts.

Agents should prepare for continued subdued sales activity in the short term but remain alert to potential improvements in 2026, particularly if interest rates ease and political uncertainties diminish. Monitoring regional variations, especially in London, will also be crucial for informed decision-making.

Looking Ahead: Support for Landlords

In response to these challenging market conditions, the Landlord Association (TLA) is launching a new Trusted Partners Hub in Q1 2026. This initiative will feature verified and approved service providers selected to support landlords, tenants, and property management businesses. Service providers in legal, trades, insurance, financial, mortgage, tenant screening, and other relevant sectors are invited to register their interest here: https://landlordassociation.org.uk/become-a-tla-service-partner/