The latest RICS Residential Market Survey indicates a further weakening in UK housing market activity in November, with falling buyer demand, reduced property listings, and sluggish sales. This downturn follows the Autumn Budget, which appears to have dampened confidence among buyers and landlords alike. For landlords, these trends highlight ongoing challenges in tenant demand and investment returns amid new tax measures and affordability concerns.

Housing Market Activity Declines Post-Budget

According to the RICS survey, the UK housing market experienced another month of declining activity in November. Agents reported a continued fall in buyer enquiries, shrinking instructions to sell or let properties, and slow sales transactions. The political uncertainty and speculation surrounding the Autumn Budget, including multiple leaks, contributed to households adopting a cautious stance, delaying buying decisions.

For landlords, this environment is particularly significant as it affects both sales and lettings markets. The lettings sector showed signs of slowing, with landlord instructions remaining negative at -39%. Many respondents attributed this to the new income tax on property announced in the Budget, which is perceived as a deterrent to investment in rental properties.

Tenant Demand and Rent Expectations

Tenant demand has notably cooled, with the net balance dropping to -22%, marking the weakest level since April 2020. This decline in tenant interest could impact rental income stability for landlords. Despite this, near-term rent price expectations remain positive at +6%, suggesting only marginal increases in rents over the coming months, with a forecasted rise of around 2.5% next year.

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. The additional tax levied on landlords in the Budget will likely exacerbate this trend.” This highlights the delicate balance landlords face between managing tenant demand and navigating increased taxation.

Buyer Enquiries and Sales Outlook

The survey revealed a sharp drop in new buyer enquiries, with a net balance of -32% in November, a steeper decline than October’s -24% and the weakest reading of the year. Agreed sales remained low at -23%, consistent with the previous month’s figure, reinforcing a subdued sales trend throughout the autumn. The near-term sales outlook also deteriorated, falling to -6% from -3%.

However, agents are cautiously optimistic about 2026, with a net balance of +15% expecting sales volumes to increase, an improvement from last month’s +7%. This suggests that while the current market conditions are challenging, there may be a modest recovery in the medium term.

Supply Constraints and Price Trends

New property listings continue to fall, with a net balance of -19%, closely matching October’s -20%. Appraisal levels have declined for four consecutive months, indicating a weak supply pipeline as the winter season approaches. Nationally, prices are softening, registering a net balance of -16%, with London experiencing a sharper decline at -44%.

For landlords, these supply constraints could maintain rental demand pressures despite the overall market slowdown. However, falling property prices may affect investment valuations and decisions regarding portfolio expansion or disposals.

Market Sentiment and Political Factors

Tom Bill, head of UK residential research at Knight Frank, noted that the “barrage of property tax speculation before the Budget unsurprisingly soured sentiment among buyers and sellers.” He expects existing transactions to accelerate before Christmas and activity to remain relatively strong in early 2026. Bill also highlighted that a downward trajectory for interest rates would support demand, though political uncertainty remains a key risk.

He added, “The game of ‘guess the tax rise’ played in recent months could become a game of ‘guess the Chancellor’ if next spring’s local elections are as bad for Labour as the polls suggest.” This underscores the ongoing political factors that landlords and agents must monitor closely as they plan for the year ahead.

Implications for Landlords

Landlords should be aware that the new income tax on property introduced in the Autumn Budget is contributing to a cautious investment climate. Tenant demand is softening, but rental price expectations remain moderately positive due to limited stock availability. Monitoring tenant demand trends and adjusting rental strategies accordingly will be important to maintain occupancy and income levels.

Additionally, the subdued sales market and falling property prices may influence decisions on portfolio management, including timing for sales or acquisitions. Staying informed about political developments and interest rate forecasts will help landlords navigate the uncertainties ahead.

Looking Ahead: Trusted Partners Hub Launch

The Landlord Association (TLA) is launching a new Trusted Partners Hub in Q1 2026, designed to support landlords, tenants, and property management businesses by providing access to verified and approved service providers. This initiative will include legal, trades, insurance, financial, mortgage, tenant screening, and other essential services. Service providers interested in joining can register their interest here: https://landlordassociation.org.uk/become-a-tla-service-partner/.