RICS: The budget did not stimulate the real estate market, and a recovery is not expected until spring 2026

According to data from the Royal Institute of Chartered Surveyors, the Autumn Budget hasn't improved sentiment in the real estate market

According to research by the Royal Institute of Chartered Surveyors (RICS), the Autumn Budget in November stifled housing market activity, and a recovery is unlikely until the spring.

Buyer demand was at its lowest point since late 2023, according to the most recent RICS UK Residential Market Survey for 2025. New instructions and agreed sales were also negative.

In response to a series of questions posed to its members (surveyors and estate agents) regarding the evolution of the housing market, the RICS report generates net balance scores ranging from -100 to +100.

According to the professional association, three quarters of the sample of responses were collected subsequent to the Autumn Budget, offering the most recent assessment of market sentiment after the fiscal update.

"The housing market has been struggling for momentum for several months, and the recent Budget announcements are unlikely to materially shift that picture," stated Simon Rubinsohn, chief economist at RICS.

"The budget-related uncertainty has ended, which is good, but the basic issues of affordability and high borrowing costs will probably keep activity muted for some time to come. A "

The housing market after the budget.

In her Autumn Budget last month, the chancellor didn't have many positive developments regarding the housing market.

Prime property owners will pay mansion taxes on homes valued at more than £2 million instead of the anticipated stamp duty reforms, and the tax on property income has been raised.

In the run-up to the budget, the market had already stopped, and the RICS study indicates there is little chance of notable growth in the near future.

According to the RICS report, new buyer inquiries in November showed a net balance of -32 percent, down from -24 percent in October. This was the lowest reading since late 2023.

With a net balance of -23 percent, agreed sales continued to decline.

Sales projections, however, declined, resulting in a net balance of -6% as opposed to -3% in October.

The headline net balance for new instructions was -19 percent, which is comparable to the prior reading of -20 percent and suggests that the number of properties being listed for sale is still slowing down.

Additionally, a net balance of -40% of respondents stated that fewer market appraisals are being conducted than there were a year ago. According to RICS, this implies that the pipeline for new instructions is probably going to stay quiet for some time to come.

The good news is that, compared to last month's +7 percent, a net balance of +15 percent of respondents expect sales volumes to increase.

In 2026, will home prices increase?

The rush to beat changes in stamp duty thresholds in the first three months of 2025, followed by concerns about property tax changes in the lead-up to the Autumn Budget since September, drove the housing market.

As a result, there were few opportunities for activity, and the Autumn Budget did not offer any policy improvements to the real estate market.

Expectations for home prices are being fueled by this.

According to the RICS survey, a net balance of -15% does not anticipate price increases in the near future, but +24% anticipate price increases over the next 12 months.

However, there are regional variations.

Due in part to plans for a mansion tax, London's net balance fell to -44 percent, making it the most negative area of the United Kingdom.

On the other hand, respondents in Scotland and Northern Ireland continue to point to an increasing trend in housing costs.

The possibility of interest rate cuts and lower borrowing costs in 2026 has analysts optimistic that demand will increase and home prices will rise.

"The 12-month outlook has brightened somewhat, probably reflecting a growing sense that the Bank of England may have a little more scope to lower interest rates than seemed plausible only a short while ago," Rubinsohn continued. The "

Recent market forecasts reflect the optimistic outlook.

According to estate agency brand Hamptons, average home prices will increase by 2.5 percent in the upcoming year, with the Midlands and North experiencing stronger growth due to less stretched affordability.

Next year, Savills anticipates a 2 percent increase.

"The barrage of property tax speculation prior to the Budget unsurprisingly soured sentiment among buyers and sellers," stated Tom Bill, head of UK residential research at Knight Frank, which has previously forecast that growth will be flat in 2026.

"Now that the situation is clear, we anticipate that current transactions will pick up speed prior to Christmas, and early 2026 activity should continue to be fairly robust.

"Demand will be supported by a declining interest rate trajectory, but the main risk will be political unpredictability. If next spring's local elections prove to be as disastrous for Labour as the polls indicate, the recent game of guess the tax increase could turn into a game of guess the chancellor. A "