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The UK housing market lost momentum in September as higher mortgage costs and economic uncertainty coincided with weaker buyer enquiries, agreed sales and house-price sentiment, according to a survey by the Royal Institution of Chartered Surveyors (RICS). The findings, published on October 6, show a setback after several months in which some measures of market weakness had been easing.
RICS’ net balance for new buyer enquiries fell to minus 22 per cent from minus 18 per cent in August, while its balance for agreed sales slipped to minus 18 per cent from minus 16 per cent. The house-price balance also deteriorated, to minus 32 per cent from minus 28 per cent. These are balances between respondents reporting increases and those reporting decreases, not percentages of homes or transactions that fell.
The survey arrives as mortgage borrowing costs have climbed. Separate Bank of England data cited in contemporaneous reporting put the average five-year fixed mortgage rate for borrowers with a 75 per cent loan-to-value ratio at 4.98 per cent at the end of September, its highest level since 2023. The combination is a fresh challenge for households weighing affordability and whether to move.
Survey points to weaker demand and sales
The September results suggest buyers and sellers have become more cautious, but they do not show every indicator at its weakest point of the year. RICS said buyer enquiries remained better than the recent low of minus 41 per cent recorded six months earlier, and the agreed-sales reading was less negative than its three-month average of minus 25 per cent.
The near-term outlook weakened further: the net balance for expected sales over the next three months fell to minus 6 per cent, from minus 3 per cent in August. RICS head of market research and analysis Tarrant Parsons said renewed interest-rate expectations had created a headwind, with buyers more cautious and activity losing some momentum. He characterized the results as pointing to subdued activity potentially lasting longer, rather than a significant change in the market’s direction.
Prices under pressure, with regional differences
Surveyors’ reports of house prices continued to turn more negative in September, reversing four consecutive months of improvement in the headline balance. Expectations for prices over the next three months were also negative, at minus 24 per cent. On a 12-month horizon, however, the balance stood at zero, indicating respondents collectively expected a broadly flat trend rather than a further directional shift.
The national picture was uneven. RICS reported that most parts of England had more negative price balances, with London notably weaker than the national reading. Scotland recorded modest price growth, while prices continued to rise in Northern Ireland. The survey captures professionals’ assessments of market direction; it is not a measure of the average price paid for a home.
Some supply returns as rental demand rises
There were tentative signs of more homes coming to market. The net balance for new sales instructions reached plus 6 per cent, its first positive reading since mid-2025, although survey respondents said appraisal activity remained below its level a year earlier. This increase in instructions does not, by itself, establish that overall housing supply has recovered.
The lettings market showed a different pattern. A net balance of 23 per cent of respondents reported increased tenant demand in September, the third consecutive monthly acceleration in that measure, while landlord instructions remained firmly negative. RICS’ balance for expected rental growth over the coming three months was plus 37 per cent, down from plus 44 per cent in August but above the first-half 2026 average of plus 27 per cent.
Borrowing costs and the next market signals
The mortgage-rate figure reported for September is a benchmark for a particular fixed-rate product and loan-to-value ratio, not the rate every borrower pays. Even so, the rise adds context to the survey’s account of buyers facing less favorable borrowing conditions. Separate figures reported by Lloyds put the average UK house price at £298,441 in September, unchanged from a year earlier.
RICS’ next monthly survey will provide an update on whether demand, transactions and prices continue to weaken or stabilize. For now, its findings show a market where the short-term outlook has softened, while its 12-month house-price expectations remain broadly flat. The survey does not establish how much of the September change was caused by mortgage rates as opposed to other economic uncertainty.
