UK Housing Market: Is the Worst Over or Is Another Slowdown Coming?

10th September 2026

Britain's housing market may finally be showing signs of finding its feet, but the latest survey from the Royal Institution of Chartered Surveyors suggests that anyone expecting a rapid recovery should probably wait a little longer.

The August RICS Residential Market Survey paints a mixed picture. Buyer interest and agreed sales have both improved from the lows seen earlier this year, while the downward pressure on house prices has eased slightly. But the market remains weak, mortgage costs are still a major concern and the survey's Scottish comments suggest that conditions north of the border may be rather less encouraging.

The clearest sign of improvement is in buyer enquiries. The RICS net balance moved to -19% in August. That is still negative, meaning more surveyors reported falling rather than rising demand, but it is the least negative reading since January and represents the fifth consecutive month in which the measure has improved.

Agreed sales tell a similar story. The balance was -17%, the least negative result since February and a substantial improvement from the -38% recorded in April. Expectations for sales over the next three months also improved, moving from -13% to -3%, effectively approaching neutral.

Looking a year ahead, the picture becomes slightly more optimistic. Six per cent more surveyors expect sales volumes to rise rather than fall, compared with 3% in July.

That does not amount to a housing boom. It suggests something rather more modest: the market may be coming out of the worst part of its recent slowdown.

House prices, however, are still under pressure. The RICS price balance was -28% in August, only marginally better than -29% in July. It has nevertheless improved steadily from -35% in April.

It is important to understand what this figure means. A reading of -28% does not mean that house prices have fallen by 28%. It means that there are 28 percentage points more surveyors reporting falling prices than rising prices. RICS itself warns that the measure records the breadth of price movements rather than their size.

In other words, the market is still seeing more downward pressure than upward pressure, but the pressure is becoming less widespread.

There is also little sign of a flood of new properties coming onto the market. New vendor instructions produced a net balance of zero, suggesting listings have been broadly flat. RICS says this means the supply of homes available for sale is unlikely to expand materially in the immediate future.

That creates an interesting stand-off. Buyers remain cautious because borrowing is expensive, while many existing homeowners appear reluctant to sell unless they achieve a price they consider acceptable.

The result can be a market in which transaction numbers remain depressed without producing the kind of house-price collapse that some might expect.

And then there is Scotland

The RICS survey collects Scottish information separately from its headline England and Wales figures. One Scottish contributor, Grant Robertson of Allied Surveyors Scotland, described the market as slowing sharply, with established property chains falling through and resales taking place at lower levels. He questioned whether this was simply a post-summer slowdown or something more fundamental linked to mortgage rates and taxation.

Other Scottish contributors were more positive. A Perth surveyor described most areas as stable and expected the final quarter to be broadly in line with historic norms. A Dumfries and Galloway surveyor reported that viewings had fallen slightly during August but said new listings and appraisals remained steady, potentially pointing towards a stronger autumn.

That mixed picture is probably more useful than trying to produce a single verdict for Scotland.

The rental market provides another part of the story. Tenant demand strengthened, with an RICS balance of +18% reporting rising demand. At the same time, landlord instructions remained negative at -14%, indicating constrained supply. Surveyors expect rents to rise by about 3% over the next year.

That is significant because the forces affecting the sales and rental markets are increasingly connected. If people cannot afford to buy, they remain renters for longer. If landlords leave the market, the supply of rented homes falls. That can push rents higher while simultaneously making it harder for tenants to save enough for a deposit.

The big question is what happens to mortgage rates.

RICS says interest-rate uncertainty remains a significant obstacle to a housing recovery. That concern has become even more important as higher energy prices from the Middle East conflict put pressure on inflation and borrowing costs.

The latest survey therefore does not tell us that the housing market is recovering. It tells us something more subtle.

The deterioration may be slowing, but the market has not yet escaped the pressures that caused it.

For buyers, that could mean more choice and greater negotiating power than during the boom years, particularly where sellers have priced unrealistically. For sellers, the message is increasingly clear: the market may reward realistic pricing rather than simply waiting for prices to return to yesterday's levels.

For Scotland, and particularly areas such as Caithness where property markets can behave very differently from those in central Scotland, national figures need to be treated with caution.

The housing market may be finding its feet.

But it is still walking on fairly uneven ground.

Read the full RICS survey HERE
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