Interest from buyers and sales activity drop after adjustments to stamp duty. – TNT

UK housing market unsurprisingly slowed in April, with the volume of buyer enquiries and agreed sales falling, amid ongoing economic uncertainty and recent changes to stamp duty.

The latest RICS Residential Market Survey shows that new buyer interest declined for the third consecutive month, with a net balance of -33% indicating a fall in enquiries. This reflects growing caution from prospective buyers alongside affordability pressures and tight borrowing conditions.

Sales activity also continued to soften. A net balance of –31% of survey participants reported a decline in agreed sales over the month, the weakest figure recorded since mid-2023 (-42% August 2023), pointing to a subdued spring market.

RICS chief economist, Simon Rubinsohn, said: “Although geopolitical developments haven’t helped the mood music in the residential market over the past month, the main reason for the dip in the key RICS sales activity metrics lies in the expiry of the stamp duty holiday at the end of March. Near term expectations indicators suggest the subdued trend will persist for the next few months at least but looking beyond this, the results are more encouraging reflecting in part the prospect of deeper interest rate cuts than previously anticipated.”

Short-term expectations remain modest, with a net balance of –15% anticipating a further dip in sales over the next three months. Despite this, there are signs of improvement on the horizon. A net balance of +17% of respondents expects sales to rise over the year ahead, up from +11% in March, suggesting that longer-term sentiment remains more positive.

House prices held steady in April, slipping slightly into negative territory at –3% from +2% previously. While short-term price expectations remain cautious, with a net balance of –21% of respondents anticipating some downward pressure over the next three months, the longer-term view is more resilient. A net balance of +39% of survey participants expect prices to return to growth over the year ahead.

On the supply side, new instructions to sell remained flat, posting a net balance of +6% for the second month in a row. Similarly, the flow of property appraisals only rose marginally suggesting no meaningful change in supply conditions in the near term.

Jeremy Leaf, north London estate agent and a former RICS residential chairman, said: “Unfortunately, not even the arrival of better weather and the prospect of lower mortgage rates could shake the traditionally busier spring housing market out of its lethargy. Too many available flats has meant only demand for houses has held up well in recent weeks – and more than we dared to expect. There’s no doubt the end of the stamp duty holiday in March brought forward many moving decisions. As a result, prices are softening as most buyers and sellers are not withdrawing but preferring to find middle ground if possible despite continuing worries about economic prospects and pace of interest rate falls.”

Tom Bill, head of UK residential research at Knight Frank, commented: “Despite a predictable lull in April following the stamp duty cliff edge, demand in the UK housing market is relatively robust. The tariff turbulence means the Bank of England is expected to cut rates more quickly, which means more sub-4% mortgages have appeared although demand would falter if things got too bumpy. However, the inflationary impact of measures like higher rates of employer national insurance is a risk that could push borrowing costs up later this year.”