Housing market could also be turning a nook as confidence grows

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Your help makes all of the distinction. Learn extra The UK housing market could also be “turning a nook”, with indicators that confidence is returning and that expectations for gross sales and costs have gotten extra constructive, based on surveyors.

Gross sales expectations amongst property professionals for the subsequent three months picked as much as the strongest stage recorded since October 2024, based on the December survey from the Royal Establishment of Chartered Surveyors (Rics).

A web stability of twenty-two% of execs count on gross sales to extend reasonably than lower within the subsequent three months.

Trying 12 months forward, there have been indicators of stronger optimism, with a web stability of 34% of execs anticipating the variety of gross sales to extend.

Surveyors pointed to easing rate of interest expectations and the clearing of budget-related uncertainty as key drivers behind the turnaround in temper.

Whereas home costs within the subsequent three months are anticipated to stay broadly flat, momentum is predicted to select up wanting additional forward, with a stability of 35% of execs anticipating costs to extend over the subsequent 12 months, marking essentially the most upbeat outlook since late 2024.

Rics mentioned the housing market remained “smooth” on the finish of 2025, with a web stability of 24% of execs reporting a fall in new purchaser inquiries and a stability of 19% of execs seeing a fall in gross sales.

Each measures improved barely on the earlier month, indicating that the downturn is dropping momentum, it mentioned.

Home costs continued to edge down usually in December, with a web stability of 14% of execs reporting falls, though the downward development is moderating, the report mentioned.

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Home costs in December had been falling notably sharply in London and the South East, whereas Scotland and Northern Eire proceed to report home worth development.

Rics mentioned the lettings market stays beneath strain, with persistent provide constraints.

Rents are anticipated to maintain rising, with common rental development forecast at round 3% over the subsequent 12 months, the report mentioned.

Tarrant Parsons, head of market analysis and evaluation at Rics, mentioned: “The UK residential market stays in a protracted smooth patch, with December’s survey recording a sixth consecutive month of damaging momentum in purchaser inquiries.

“That mentioned, there are tentative indicators of a shift in sentiment beneath the floor.

“Close to-term gross sales expectations have strengthened, and the 12-month outlook has edged into extra constructive territory.

“The important thing take a look at for 2026 will likely be whether or not borrowing prices ease on a sustained foundation.

“In that case, this might present the catalyst wanted to drive a restoration in purchaser demand.”

Tom Invoice, head of UK residential analysis at Knight Frank, mentioned: “The mix of readability round taxation and the prospect of additional charge cuts means demand within the first weeks of January has been stronger than regular.

“That doesn’t imply the market is now on an upwards trajectory and home political dangers might nonetheless undermine sentiment over the subsequent six months.

“For now, the absence of unhealthy information signifies that a number of the demand that turned pent up final 12 months is being launched and we count on UK costs to develop by 3% this 12 months.”

He added: “Tenant demand has been comparatively robust within the lettings market following the finances and the readability it introduced.

“Nonetheless, provide remains to be beneath strain as extra landlords promote up because of the proliferation of crimson tape and taxes lately.”

Sarah Coles, head of private finance at Hargreaves Lansdown, mentioned of the Rics report: “This can be a main change in sentiment, however it stays to be seen whether or not it is going to be shared by consumers and sellers within the coming months.

“There's all the time hope that the contemporary enthusiasm of a brand new 12 months will draw folks again to the market – prepared for a brand new begin.

“The truth that mortgage charges have fallen and home costs are rising extra slowly than wages ought to assist extra consumers wrestling with affordability challenges.”

She added: “There's the hope that with rents anticipated to rise 3%, wages would possibly develop sooner, defending renters.

“Nonetheless, given how wage rises have slowed and the variety of jobs within the economic system has been dropping, there aren't any ensures.”

David Fell, lead analyst at Hamptons, mentioned: “The North-South divide appears to be like more likely to persist into 2026. Housing markets throughout the Midlands and North appear set to maintain the lion’s share of home worth development this 12 months.

“In the meantime, early indicators recommend that sellers in southern markets are nonetheless having a more durable time. Many have seen worth development grind to a halt, and even in some circumstances, slip backwards.

“Southern markets will bear the brunt of the approaching mansion tax, and 2026 will see costs right here regulate to mirror this new actuality.

“Whereas 2026 will see some debtors coming to the top of shorter, dearer fixed-rate offers and securing cheaper affords, some are nonetheless adjusting to dearer repayments.”