UK house prices are expected to stagnate for the rest of 2025, according to the latest market snapshot from the Royal Institution of Chartered Surveyors (RICS), which has warned that signs of recovery in the housing market have faltered.
In its July survey of members, RICS reported that demand from buyers softened, agreed sales slipped, and house price growth remained negative — raising doubts over the near-term outlook.
New buyer enquiries fell back into negative territory, with a net balance of -6% recorded in July, compared with +4% the previous month. Agreed sales also deteriorated, with a net balance of -16% versus -4% in June, marking the weakest reading since early spring.
Looking ahead, sentiment suggests the market will remain broadly flat in the short term. A net balance of just +1% of surveyors expect sales to rise in the near term, down from +7% in June. At the 12-month horizon, however, optimism picks up slightly, with a net balance of +8% anticipating higher activity next year.
House prices slipped further in July, with a net balance of -13% of respondents reporting price falls nationally, compared with -7% in each of the previous two months. The decline was most pronounced in southern England, while markets in Northern Ireland, Scotland and the North West of England bucked the trend with modest gains.
While the sales market falters, the lettings sector continues to experience severe supply shortages. Tenant demand held broadly steady, with a net balance of +4%, down from +14% in the previous quarter. However, landlord instructions fell sharply to a net balance of -31%, the weakest level since April 2020.
With supply tightening, surveyors expect rental prices to rise further over the next three months, with a net balance of +25% predicting increases.
Simon Rubinsohn, RICS’s chief economist, said: “The somewhat flatter tone to the July Residential Survey highlights the ongoing challenges facing the housing market. Although interest rates were lowered at the latest Bank of England meeting, the split vote has raised doubts about both the timing and extent of further reductions. Meanwhile, uncertainty about the potential contents of the Chancellor’s autumn budget is also raising some concerns. Against this backdrop, respondents continue to report that the market remains particularly price sensitive at the present time.”
The slowdown comes after a brief rebound in activity earlier this year, which had suggested the worst of the market downturn was over. Analysts say the combination of affordability pressures, limited mortgage relief, and anxiety over tax changes in the autumn budget is keeping buyers on the sidelines.
