Buyers remain on the sidelines and landlords are still pulling stock from the lettings market, according to the latest RICS housing market survey.
For investors, the July 2026 snapshot shows a familiar split: a stalled sales market alongside a rental sector where shrinking supply is bolstering expectations of higher rents.
The Royal Institution of Chartered Surveyors’ UK-wide poll of its members found no pick-up in activity over the month. Yet sentiment about the year ahead has crept into positive territory, reaching its best level since February.
Buyer demand stuck in neutral
New buyer enquiries posted a net balance of -28 per cent in July, identical to June. That is at least an improvement on the -41 per cent trough recorded in March.
Agreed sales told the same story, holding at -30 per cent, although that compares with -37 per cent in April.
The supply of homes for sale is steadier. New vendor instructions came in at -4 per cent, a marked recovery from -23 per cent in June, while market appraisals returned a balance of +19 per cent against the same period last year.
Surveyors appear to think the worst has passed. Near-term sales expectations improved for a fourth successive survey to -14 per cent, and the 12-month outlook rose to +3 per cent, its strongest reading since February.
House prices still falling, with London under most pressure
The national price balance stood at -30 per cent, a modest improvement on -32 per cent in June and -35 per cent in April. Price falls, in other words, remain more widespread than rises.
Southern England is bearing the brunt. Respondents in London, the South East and the South West continue to report weaker price balances than the national average, while those in Northern Ireland are still seeing values climb. In Scotland, momentum appears to be flattening after a sustained spell of stronger growth.
Expectations for the next three months sit at -31 per cent, though the year-ahead view improves to +4 per cent. London bucks that trend, with 12-month price expectations sliding to -23 per cent in July from -10 per cent previously.
The softness is not new: UK house prices slipped for a second consecutive month earlier this year as borrowing costs rose. RICS chief economist Simon Rubinsohn said the market “remains subdued”, adding that “it is clear from the RICS seasonally adjusted data that the combination of geopolitics, the domestic political climate and the cost of mortgage finance are continuing to weigh on sentiment.”
Rental supply squeeze deepens
On the lettings side, tenant demand was broadly flat in the three months to July, at -1 per cent, down from +12 per cent in the previous survey. Landlord instructions, by contrast, remained firmly negative at -27 per cent.
That imbalance is underpinning pricing confidence. A net balance of +28 per cent expect rents to rise over the next three months, up from +25 per cent, according to the RICS UK Residential Market Survey for July 2026.
Rubinsohn was clear about one driver. “Feedback from respondents to the RICS survey is continuing to draw attention to the impact of the latest round of regulation on the rental market, with the key indicator of new instructions pointing to a further drop in supply,” he said.
The finding chimes with wider warnings of a landlord exodus from England’s private rented sector as reforms bed in.
What the RICS housing market survey means for investors
For landlords already holding stock, the survey suggests rental income rather than capital growth will do the heavy lifting in the months ahead. Dwindling instructions set against stable tenant demand is the combination that tends to support rents, a theme explored in our UK rental market forecast for 2026.
For buyers, flat demand and falling price balances point to negotiating room, particularly in London and the South where pricing is weakest. The cost of mortgage finance remains the obvious brake, so leveraged purchases need careful stress-testing against yields.
The positive 12-month readings hint that this window may not stay open indefinitely. But with geopolitics, domestic politics and regulation all still weighing on the market, investors should watch whether landlord instructions keep falling in the coming months, because that will shape rental returns far more than any recovery in sales.
