Expectations for rental growth over the next three months have grown, hitting their strongest reading since early 2024, according to the latest Royal Institution of Chartered Surveyors (RICS) UK Residential Market Survey.
It shows that expectations for rental growth over the next three months climbed to +41%, from +29%.
The increased expectations come as rent price pressure strengthened in October. This is after tenant demand returned to modest growth while landlord instructions continued to fall during October.
On the quarterly, seasonally adjusted measure, tenant demand rose to a net balance of +7%, from -1%, while landlord instructions registered -30%.
Meanwhile, the outlook for housing sales is now at its weakest since July 2023, as mortgage interest rate rises impact buyer demand.
The new buyer enquiries indicator remained at a net balance of -24%, unchanged from September, with virtually all parts of the UK reporting either falling or stagnant demand. Meanwhile, the agreed sales balance hit its weakest reading in three months, down to -24% from -18%, its weakest reading in three months.
Twelve-month sales expectations fell to a net balance of -17%, the most pessimistic assessment since July 2023, but expectations for the next three months were also negative, at -11%.
House prices fell, with the headline balance falling to -36% from -34% and marking the second consecutive monthly deterioration following signs of stabilisation over the summer.
London, East Anglia, the West Midlands and the South East recorded weaker price trends than the headline average. However, prices continued to rise in Northern Ireland, and Scotland and the North West of England reported modest growth.
The twelve-month price expectations balance fell to -17% from zero, with separate percentage estimates pointing to a relatively modest decline of around 1%.
The flow of homes coming onto the sales market also weakened, with new instructions slipping to a net balance of -8%, from +6% previously. The market appraisals indicator fell to -34%, its lowest since November 2025. Both measures suggest the pipeline of new listings could slow further in the coming months.
RICS head of market research and analysis Tarrant Parsons said: “Home buyer demand remains subdued, and respondents are bracing for a weaker year ahead for sales given the persistent macroeconomic challenges being faced.
“In accordance with this, the Bank of England’s rate rise was accompanied by a clear warning that policy may need to tighten further if higher energy costs feed through into wider prices. With inflation now projected to approach 5% next year, mortgage rates are likely to remain elevated for longer, thereby continuing to weigh on the market.”
This article is taken from Landlord Today