RICS: Buyers have not yet returned to the real estate market, but seller confidence has reached a new high

According to the Royal Institute of Chartered Surveyors' (RICS) most recent Residential Market Survey, there are indications that the housing market is gradually regaining confidence

Research indicates that while sentiment in the real estate market seems to be improving, actual sales aren't yet following suit.

Following months of uncertainty, expectations for home sales and prices have improved, according to the most recent Residential Market Survey for December from the Royal Institute of Chartered Surveyors (RICS).

It coincides with the housing market stagnating in the last few months of the year due to uncertainty surrounding tax increases in the Autumn Budget.

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.

The November report indicated that following the fiscal update, confidence remained low.

However, since then, declining mortgage rates and interest rate reductions have helped homebuyer budgets.

Although surveyors are pessimistic about the current market, the RICS report indicates that there are expectations for change in the upcoming months.

Specifically, sales projections for the next three months reached their highest point in over a year.

However, the report states that agreed sales and buyer demand are still negative.

I have hope for the housing market.

Last year, as the market adjusted to increased stamp duty costs and dealt with the uncertainty of the Autumn Budget, house price growth slowed.

With the completion of the budget and the possibility of further interest rate reductions, there are hopes that the housing market will at last take a break.

The RICS report indicates that supply conditions have stabilized.

However, this hasn't yet resulted in home purchases.

In December, agreed sales and buyer demand continued to be negative.

While agreed sales recorded a net balance of -19%, new buyer inquiries registered a net balance of -24%. Nonetheless, both metrics showed a slight improvement over the prior month, indicating that the decline is slowing down, according to RICS.

In the meantime, after declining for several months, new vendor instructions flattened to a net balance of 0%.

Low appraisal activity suggests that any significant increase in stock will take time to materialize, the report warned, even though this suggests the market has stopped declining.

Positively, sales projections for the upcoming three months increased to +22%, the highest level since October 2024.

With a longer time horizon, the real estate market's prospects also improve.

A net balance of +34% of respondents anticipate a more than twofold increase in sales volumes over the next 12 months.

The turnaround in sentiment was attributed by surveyors to lower interest rate expectations and the resolution of budgetary uncertainty.

"The UK residential market remains in a prolonged soft patch, with Decembers survey recording a sixth consecutive month of negative momentum in buyer enquiries," stated Tarrant Parsons, head of market research and analysis at RICS. Nevertheless, there are tentative indications of a change in sentiment below the surface.

"Expectations for near-term sales have increased, and the 12-month forecast has slightly improved. Whether borrowing costs continue to decline will be the primary test for 2026. If this is the case, it might serve as the impetus for a rebound in consumer demand. The "

Will home values increase in 2026?

The days of double increases in the price of digital homes seem to be over.

As 2025 came to an end, the growth in house prices slowed.

There are differing predictions. According to the real estate website Zoopla, house prices will grow at a slow rate of 1.5 percent in 2026, while Halifax predicts growth of up to 3 percent.

According to Hamptons research, 14.8% of Londoners sold their homes for less than they paid for them in 2025, which is higher than the national average of 8.7% and the highest percentage in England and Wales.

With a net balance of -14%, respondents to the RICS report indicate that house prices are still declining nationally, although the trend is obviously slowing down.

There are regional variations, with prices continuing to rise in Scotland and Northern Ireland but declining more dramatically in London and the South East.

In terms of the future, short-term price expectations have improved to almost flat levels, and +35% of respondents now anticipate price increases over the coming year, which is the most optimistic outlook since late 2024.

"The renewed confidence seen in recent weeks underlines the rule that the less a government intervenes in the housing market, the closer it operates to full capacity," said Tom Bill, head of UK residential research at Knight Frank, in response to the report.

"Demand has been higher than usual in the first few weeks of January due to the clarity surrounding taxes and the possibility of additional rate cuts.

That does not imply that the market is currently on an upward trajectory, and over the next six months, sentiment could still be negatively impacted by domestic political risks. As of right now, the lack of negative news indicates that some of the pent-up demand from the previous year is being released, and we anticipate a 3% increase in UK prices this year. A "