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

For landlords, these developments suggest a cautious lettings market with tenant demand softening and rental growth expected to be modest. Understanding these shifts is crucial for managing investment strategies and anticipating market conditions in the coming months.

Housing Market Activity Declines Post-Budget

According to the RICS survey, the UK housing market experienced a further slowdown in November. Buyer demand continued to fall, with a net balance of -32%, marking the weakest reading since the start of 2023. This decline was sharper than October’s -24%, reflecting a notable drop in new buyer enquiries. Sales activity also remained subdued, with agreed sales at -23%, barely changed from the previous month.

New property listings showed little improvement, holding at -19%, consistent with the previous month’s figures. Appraisals have declined for four consecutive months, signalling a weakening supply pipeline as the winter season approaches. Nationally, house prices continue to soften, with a net balance of -16%, while London’s market is particularly affected, with price expectations falling to -44%.

Impact on the Lettings Market and Rental Expectations

The lettings market is also showing signs of cooling. Landlord instructions remain negative at -39%, indicating fewer properties being offered to let. Tenant demand has dropped significantly, with a net balance of -22%, the lowest level since April 2020. Despite this, near-term rent price expectations remain positive at +6%, suggesting only marginal increases in rental values in the coming months, with an anticipated 2.5% rise next year.

Simon Rubinsohn, RICS’ chief economist, noted that although tenant demand is softening, the limited availability of rental properties is keeping rental expectations elevated. He also highlighted that the additional income tax on landlords introduced in the Autumn Budget is likely to exacerbate these challenges, potentially deterring investment in the rental sector.

Market Sentiment and Future Outlook

Political uncertainty surrounding the Budget, including numerous leaks prior to its announcement, has contributed to subdued market sentiment. Many potential buyers and sellers remained on the sidelines, awaiting clarity. Tom Bill, head of UK residential research at Knight Frank, commented that the pre-Budget speculation had understandably dampened sentiment but expects existing transactions to pick up before Christmas and activity to remain relatively strong into early 2026.

Looking ahead, the twelve-month outlook has improved somewhat, with a net balance of +15% of agents anticipating increased sales volumes in 2026, up from +7% last month. This optimism partly reflects expectations that the Bank of England may have more scope to reduce interest rates than previously thought, which could support demand. However, political uncertainty remains a key risk factor for the market.

Implications for Landlords and Letting Agents

For landlords, the current environment suggests a cautious approach is advisable. The new income tax measures introduced in the Autumn Budget may reduce investment appetite, while tenant demand is softening and rental growth is expected to be modest. Letting agents should be prepared for a slower market with fewer new landlord instructions and a need to manage tenant expectations carefully.

Landlords may also need to consider the impact of affordability and borrowing costs on tenant demand and rental income. Maintaining competitive rental pricing and ensuring properties meet tenant needs will be important to retain occupancy in a market where demand is cooling.

Looking Ahead: Trusted Support for Landlords

In response to the evolving 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. Legal, trades, insurance, financial, mortgage, tenant screening, and other service providers are invited to register their interest to become part of this network, helping landlords navigate the challenges of the current market.

More information and registration details are available at: https://landlordassociation.org.uk/become-a-tla-service-partner/