RICS' Tarrant Parsons says a positive feeling in the housing market has been hit by war in the Middle East, and the outlook is now flat.
9th Apr 20260 965 2 minutes read David Callaghan
The housing market ‘has taken a knock’, which has hit confidence and removed the optimism felt at the start of the year, surveyors say.
The latest survey results by the Royal Institution of Chartered Surveyors (RICS) point to weakened demand and sales in March.
House prices are “softening” and heading for “modest declines” in the next few months, RICS says.
Broadly flatThe “12-month outlook for activity and prices turns from positive to broadly flat”, it predicts.
War in the Middle East has taken its toll on the UK economy and in turn on the property market, with mortgage rates climbing.
RICS says: “The March results suggest the housing market has moved onto a softer footing, with affordability pressures, higher financing costs and global instability combining to dampen activity.
“While the longer-term outlook is not yet signalling a severe downturn, the survey indicates that the optimism seen earlier in the year has largely faded.”
Deteriorated salesThe survey also found that enquiries fell to a net balance of -39%, down from -29% in February, marking the weakest reading since August 2023.
And agreed sales also deteriorated, dropping to a net balance of -34% from -13% the previous month.
Short-term sales expectations fell sharply to -33%, compared with -4% in February, while looking 12 months ahead, sales expectations slipped to -1%, indicating a broadly flat market.
At the same time, the headline house price balance fell to -23% in March, down from -14% and -10% in the prior two months.
Market outlookExpectations for the next three months weakened markedly to -43%, while the 12-month outlook edged down to 2%.
London, East Anglia, the South East and the South West all posted weaker price readings than the national average, while Scotland and Northern Ireland continued to report rising prices.
On the supply side, new instructions remained subdued at -6%, and unsold stock on estate agents’ books rose to an average of 47 properties, up from around 45 at the start of the year.
What had been a cautiously improving picture for activity has been knocked off course.”
Tarrant Parsons, Head of Market Research and Analysis at RICS (pictured), says: “What had been a cautiously improving picture for activity has been knocked off course by the wider macro fallout from the Middle East conflict, as the renewed deterioration in the mortgage rate outlook has proved particularly challenging.”
Industry reaction
Tom Bill, Head of UK Residential Research, Knight Frank
Tom Bill, Head of UK Residential Research at Knight Frank, says: “Sentiment in the UK housing market will improve if the two-week ceasefire in the Middle East holds, supporting transaction levels as the spring market gets underway.
“However, mortgage rates won’t snap back to where they were in February due to the longer-term inflationary impact of the war and the associated vulnerability of the government’s financial position, which will keep house prices in check.”
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Tagsaverage property sales knight frank RICS Tarrant Parsons tom bill knight frank 9th Apr 20260 965 2 minutes read David Callaghan Share Facebook X LinkedIn Share via Email