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 introduced new taxes and created uncertainty, impacting landlord confidence and tenant demand. Understanding these developments is crucial for landlords and letting agents as they navigate a challenging market environment.

Housing Market Activity Declines Post-Budget

According to the RICS survey, UK housing market activity weakened again in November, with key indicators moving further into negative territory. Agents reported a fall in buyer demand and a reduction in new property instructions, signalling a slowdown in market momentum. The political uncertainty and speculation surrounding the Autumn Budget, including numerous leaks prior to its announcement, contributed to households remaining cautious and hesitant to engage in property transactions.

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

Tenant Demand and Rent Price Expectations

Tenant demand has cooled significantly, with a net balance dropping to -22%, the lowest level since April 2020. This reduction in tenant interest may affect landlords’ ability to secure tenants promptly, potentially increasing void periods. Despite this, near-term rent price expectations remain modestly positive at +6%, suggesting only marginal rent increases in the coming months and an anticipated 2.5% rise 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 and the additional tax levied on landlords in the Budget will likely exacerbate this trend.” He emphasised that while the Budget has ended a period of uncertainty, fundamental challenges such as affordability and high borrowing costs are expected to keep market activity subdued in the near 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%. This represents the weakest reading since the start of 2023. Agreed sales figures remain low at -23%, consistent with the previous month’s -24%, reinforcing a subdued sales environment throughout the autumn.

Near-term sales expectations have also declined, with a net balance of -6% compared to -3% previously. However, agents remain cautiously optimistic about 2026, with a net balance of +15% anticipating an increase in sales volumes next year, an improvement from last month’s +7%.

Supply Constraints and Price Trends

New property listings continue to fall, with a headline figure of -19%, closely matching October’s -20%. Appraisal levels have also 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 more pronounced drop at -44%.

Market Sentiment and Future Risks

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

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 should monitor closely.

Implications for Landlords and Letting Agents

For landlords, the current market conditions mean careful consideration is needed when planning investment and rental strategies. The introduction of new property income taxes may reduce investment appetite, while softer tenant demand and modest rent growth suggest rental income increases may be limited in the short term. Letting agents should prepare for a slower market with fewer new instructions and increased competition for tenants.

Despite these challenges, the cautious optimism for 2026 offers some hope for recovery, particularly if interest rates begin to ease. Landlords and agents should stay informed of market trends and political developments to adapt their approaches effectively.

Looking Ahead: Trusted Partners Hub Launch

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, offering landlords access to trusted expertise and services.

Providers can register their interest here: https://landlordassociation.org.uk/become-a-tla-service-partner/