UK housing market downturn eases in June as buyer demand shows signs of recovery
Britain's housing market downturn eases slightly in June, with buyer demand and short-term sales expectations improving from earlier lows. Sentiment remains fragile as uncertainty over inflation, borrowing costs and the political backdrop continues to restrain activity.
Highlights
- RICS reports June headline house price balance at -33%, little changed from May's -34%, indicating UK housing market decline is slowing.
- New buyer enquiries improve to -29% and 12-month price expectations rise to +8%, reflecting tentative signs of demand recovery despite subdued sentiment from interest rate uncertainty.
- Tenant demand in rental market rises to +18%, the strongest since May 2025, with rents expected to climb 2.5% over the next year amid persistent landlord supply shortages.
June survey signals modest improvement
As reported by Reuters, citing the Royal Institution of Chartered Surveyors, the headline house price balance is little changed at -33% in June, after May's reading is revised up slightly to -34%. The measure suggests the housing market remains under pressure, but the pace of deterioration is easing.New buyer enquiries improve to -29% from -34% in each of the previous two months, marking the least negative reading since February. Near-term sales expectations also recover to -16% from a March low of -34%, while over a 12-month horizon sales are seen broadly flat at +1% and price expectations rise to +8% from +6%.
Interest rate uncertainty keeps sentiment subdued
RICS head of market and analysis Tarrant Parsons says uncertainty around the outlook for inflation and borrowing costs continues to weigh on sentiment, even after the Bank of England leaves interest rates unchanged and recent declines in oil prices offer some relief.In the rental market, tenant demand strengthens to +18%, the strongest reading since May 2025, while landlord instructions remain negative at -18%. Rents are expected to rise by about 2.5% over the next year, underscoring continuing supply pressures in the UK rental sector.
Our earlier coverage of Zillow’s ranking of the hottest U.S. rental markets highlighted how rental competition remains strongest in the Northeast and coastal California, where new housing supply has lagged demand. The piece noted that Providence, Rhode Island, topped the list amid rapid rent growth, low vacancies and relatively few concessions, showing how affordability strains can intensify even beyond the largest coastal cities.
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