The latest RICS Residential Market Survey indicates that UK housing market activity weakened further in November, influenced by uncertainty surrounding the Autumn Budget. This downturn is significant for landlords as it reflects reduced buyer demand, fewer new property listings, and a cooling lettings market, all of which impact investment decisions and rental income prospects.

Housing Market Activity Declines Post-Budget

According to the RICS survey, the UK housing market experienced a notable slowdown in November. Agents reported continued falls in buyer demand, a reduction in new instructions, and sluggish sales activity. The political uncertainty and speculation leading up to the Autumn Budget appear to have deterred many potential buyers and sellers from entering the market, resulting in subdued activity.

For landlords, this environment presents challenges as the lettings market also shows signs of strain. Landlord instructions remain deeply negative at -39%, indicating fewer properties being offered to let. This decline is partly attributed to the new income tax measures on property introduced in the Budget, which many respondents cited as a deterrent to further investment in rental properties.

Tenant Demand and Rent Price Expectations

Tenant demand has cooled significantly, with the net balance dropping to -22%, marking the weakest level since April 2020. Despite this, near-term rent price expectations remain positive at +6%, suggesting only modest rent increases in the coming months and an anticipated 2.5% rise next year. This indicates that while demand is softening, rental prices are expected to hold relatively steady, which is a crucial consideration for landlords planning their income forecasts.

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.” He emphasised that the housing market has struggled for momentum for several months and that the recent Budget announcements are unlikely to change this significantly in the short term.

Buyer Enquiries and Sales Outlook

The survey also highlights 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 since 2023. Agreed sales remain low, recording -23%, which aligns with the ongoing downbeat sales trend observed throughout the autumn. The near-term sales outlook has also worsened, falling to -6% from -3% previously.

However, there is cautious optimism for 2026, as agents expect sales volumes to improve, with a net balance of +15% anticipating increased activity next year, up from +7% last month. This suggests that while the current market is subdued, there may be a recovery on the horizon, which landlords should monitor closely.

Supply Constraints and Price Softening

New property listings remain low, with a headline figure of -19%, consistent with October’s -20%. Appraisal levels have declined for four consecutive months, indicating a weak supply pipeline as winter approaches. Nationally, prices continue to soften, with a net balance of -16%. London has experienced a more pronounced decline, with prices falling to -44%, reflecting regional disparities that landlords need to consider when managing portfolios.

Market Sentiment and Political Impact

Tom Bill, head of UK residential research at Knight Frank, noted that the pre-Budget speculation around property taxes had a negative effect on buyer and seller sentiment. He expects existing transactions to accelerate before Christmas and anticipates relatively strong activity in early 2026. Bill also highlighted that a downward trend in interest rates could support demand, but political uncertainty remains a key risk for the market.

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 consider when planning for the future.

Implications for Landlords

For landlords, the current market conditions suggest a cautious approach. The combination of reduced buyer demand, fewer new listings, and the impact of new taxation measures means that investment decisions require careful assessment. While rental prices are expected to rise modestly, the cooling tenant demand and potential for increased costs due to taxation could affect rental yields.

Landlords should stay informed about market trends and political developments, as these will influence both sales and lettings markets. Monitoring rent price expectations and tenant demand will be essential for effective property management and financial planning.

Looking Ahead: Trusted Partners Hub Launch

In response to the evolving market and to support landlords, the Landlord Association (TLA) is launching a new Trusted Partners Hub in Q1 2026. This platform will feature verified and approved service providers selected to assist landlords, tenants, and property management businesses. Service providers in legal, trades, insurance, financial, mortgage, tenant screening, and other sectors are invited to register their interest to join the hub.

This initiative aims to provide landlords with reliable resources and support to navigate the challenges of the current market environment.