October survey points to worsening sales outlook and deepening pessimism among surveyors
The UK housing market lost further ground in October as agreed sales and buyer enquiries continued to slide, weighed down by rising mortgage costs and deepening geopolitical uncertainty.
The Royal Institution of Chartered Surveyors (RICS) October 2026 UK Residential Market Survey — drawn from 235 responses covering 443 branches — found that the agreed sales net balance fell to -24%, down from -18% in September and the weakest reading in three months.
New buyer enquiries held at the same net balance of -24%, unchanged from the previous month, with virtually every region of England and Wales reporting either falling or stagnant demand over the period.
Mortgage rates are doing the damage
The October results arrive as mortgage interest rates have climbed to a three-year high (4%), dragging housing sales lower and undoing some of the tentative stabilisation seen through the summer. Elevated borrowing costs have already been compressing affordability for much of 2026 — a pressure that is now translating directly into fewer transactions.
Tomer Aboody, founding director of specialist lender MT Finance, said the increase in rates has made many buyers hesitant. “With mortgage rates increasing, along with base rate, and expectations of further rises on the horizon, buyers are understandably nervous and cautious about making a move,” he said. “With another one or two rate rises expected, we anticipate a slowdown in activity in the market. However, buyers who are able to afford the higher mortgage payments could find themselves in a strong position to negotiate with sellers due to the slowdown in registered buyer enquiries.”
The national house price net balance also worsened, falling to -36% from -34% the previous month — the second consecutive monthly deterioration after prices appeared to be levelling off during the summer. In point estimate terms, the RICS data translates to a modest decline of around 1% over the next 12 months. London, East Anglia, the West Midlands and the South East are recording weaker price momentum than the national average. Northern Ireland and Scotland remain relative outliers, with prices still edging up in both.
A market pulling in two directions
The most striking tension in the October RICS data sits between the sales market and the lettings market.
On the sales side, new instructions to sell dropped back into negative territory at -8%, reversing a positive reading of +6% the month before. Market appraisals are also at their softest since November 2025. Supply is tightening just as demand is weakening — a combination that may slow the pace of price declines but does little to restore transaction volumes.
On the lettings side, the picture is structurally different. Tenant demand returned to modest growth in October, with the net balance rising to +7% from -1% previously. But landlord instructions remain deeply negative at -30%, as more landlords exit the private rented sector. The continued exit of buy-to-let landlords from the market — driven by the Renters’ Rights Act, rising tax burdens and squeezed yields — is removing rental supply even as demand picks back up.
The result: the three-month rent growth expectations indicator jumped to a net balance of +41% in October, its strongest reading since early 2024, up from +29% the month before.
No sign of improvement on the market
Surveyors are not expecting conditions to improve any time soon, and the numbers back that up. Both the three-month and twelve-month sales expectations indicators deteriorated, returning net balances of -11% and -17% respectively. The twelve-month figure is the most pessimistic recorded since July 2023.
Rachel Springall, finance expert at Moneyfactscompare.co.uk, said the direction of travel is hard to read as anything but negative. “The outlook for the housing market over the next few months is ominous, with 12-month sales expectations falling to their most negative level in three years, according to RICS,” she said. “Rising mortgage rates over recent months are playing their part to put extra pressure on household finances, which can delay the decision to make big life changes, like buying or selling a home.”
Springall added that stretched affordability is bearing down hardest on those with the least room to move, like first time buyers. She said: “With house prices edging lower, it can give buyers more bargaining power, but unfortunately, there has also been a lull in the stream of homes up for sale. Until there is more buyer confidence, such as an easing of pressure on household budgets and more housing stock supply, a weaker housing market will struggle to rejuvenate itself in the coming months.”
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