Higher mortgage rates and Middle East conflict continue to dampen buyer demand and sales activity
Housing market conditions remain weak, with elevated borrowing costs and geopolitical instability continuing to suppress activity, according to the Royal Institution of Chartered Surveyors (RICS).
Forward-looking indicators in the latest RICS UK Residential Market Survey suggest the subdued environment will persist in the near term.
New buyer enquiries stayed firmly in negative territory in April, registering a net balance of -34%, a modest improvement on March's -40%. Agreed sales were similarly weak, recording a net balance of -36%, broadly flat compared with -35% the previous month.
Near-term sentiment remains cautious, with three-month sales expectations at -32%. Twelve-month sales expectations edged into negative territory at -6%.
Supply conditions were largely flat. New instructions recorded a net balance of -3%, though the new appraisals measure fell to -16% from zero in March, pointing to a potential weakening in the pipeline of future listings.
House prices also came under greater pressure during the month. The headline price indicator declined to -34% from -25% in March.
Source: RICS UK Residential Market Survey April 2026
The survey identified a growing regional divide, with the sharpest downward pressure concentrated in London, the South East, East Anglia and the South West. The North West and North of England continued to register marginally positive readings, while prices remained in growth in Scotland and Northern Ireland.
Near-term price expectations stood at -38%, slightly less negative than March's -45%. Twelve-month price expectations were marginally positive at +5%, though this represents the weakest reading since late 2023.
The rental market continued to reflect an imbalance between supply and demand. Tenant demand posted a net balance of +14%, while landlord instructions remained negative at -17%. A net balance of +25% of respondents expected rents to rise over the coming months.
"April's results show a housing market still in the grip of macro headwinds stemming from the Middle East conflict," said Tarrant Parsons (pictured right), head of market research and analysis at RICS.
"Recent warnings from the Bank of England that interest rate rises may be required to tackle renewed inflation, driven by elevated oil prices and disrupted supply chains, underline the challenging environment facing buyers.
"Until there is a clearer path for inflation and borrowing costs, activity and sentiment look set to remain subdued, particularly across southern England and London where affordability pressures are most acute."
Respondents in London pointed to similar pressures. "Ongoing Middle East uncertainty and recent mortgage rate increases are suppressing sales activity," said Roshan Sivapalan of London-based Blakes Surveyors. "However, demand persists for realistically priced stock, and the market continues to function where pricing aligns with buyer expectations."
Sentiment in northern markets was more resilient. "The sales market shuddered at the start of conflict in the Middle East, and the continued (relatively) high cost of borrowing has suppressed the investment market," said surveyor Neil Foster of Northumberland-based Hadrian Property Partners. "However, sales activity appears to be reviving, and we expect May to yield an increase in activity."
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