14 August 2025 — The UK housing market’s summer rebound lost momentum in July, according to the Royal Institution of Chartered Surveyors (RICS). Its closely watched survey revealed that buyer demand and agreed sales slipped back into negative territory for the first time since last December, highlighting renewed fragility in the sector.
The findings suggest that lingering uncertainty over government tax policy and the Bank of England’s next interest-rate moves are weighing heavily on confidence, leaving buyers and sellers hesitant to commit.
Buyer Enquiries and Sales Fall Back
Surveyors across the country reported that new buyer enquiries turned negative in July, reversing months of gradual recovery. The number of agreed sales also fell, ending a streak of improvement that had been building since late 2024.
The balance of surveyors seeing price rises slipped to -13%, the weakest reading since July 2024, underscoring that more professionals are witnessing price declines rather than gains.
Chief Economist Points to Policy Uncertainty
RICS chief economist Simon Rubinsohn noted that the combination of tax worries and rate doubts is dampening market sentiment:
- Interest rates: After the Bank of England trimmed its base rate to 4% earlier this month, speculation has intensified over whether further cuts will follow. This has left many households uncertain about how mortgage costs will evolve in the near term.
- Tax concerns: Chancellor Rachel Reeves has hinted at the possibility of fresh revenue-raising measures, prompting fears of additional taxes on property or investment. These uncertainties, Rubinsohn said, are causing both buyers and investors to hold back.
Stamp Duty Effects Still Playing Out
The expiry of the stamp-duty discount in April continues to distort the market. A rush of activity before the deadline inflated spring sales volumes, but the subsequent months have seen a natural lull. This cooling effect was made worse by broader anxieties over borrowing costs and taxation.
Rental Market Pressures Mount
While the sales market is slowing, the rental sector may face further strain. RICS reported that fewer landlords are listing properties, a sign that supply shortages could push rents higher through the rest of 2025.
This trend echoes recent market dynamics where many landlords, squeezed by higher mortgage expenses and tighter regulation, have chosen to exit the sector altogether. For tenants, that means rental affordability challenges may worsen, even as house price growth moderates.
Regional Disparities Remain
The July survey also showed that conditions vary across the country:
- London and the South East reported some of the steepest declines in buyer enquiries, reflecting affordability challenges and sensitivity to tax policy.
- Scotland and Northern Ireland remained relatively resilient, though demand there has also cooled compared to earlier in the year.
- Northern England saw a slowdown in activity, particularly after strong performances in the Halifax and Nationwide indices earlier in the summer.
Market Outlook: Fragile Confidence
The RICS results provide a sharp contrast to recent house price data from Halifax and Nationwide, both of which showed rising prices in July. Analysts warn that the divergence reflects short-term volatility and the difference between transaction-based indices and sentiment surveys.
Looking ahead, most experts agree the market’s trajectory will hinge on three key factors:
- The Bank of England’s policy direction — whether more cuts follow the recent move to 4%.
- Fiscal decisions from the Treasury — particularly around property taxation.
- The pace of wage growth versus mortgage costs, which will determine whether affordability continues to improve.
Conclusion
The RICS July 2025 survey paints a picture of a housing market at a crossroads. While headline indices suggest prices are holding up, on-the-ground sentiment reveals growing unease among buyers, sellers, and landlords alike.
With tax policy in flux, borrowing costs still historically high, and stamp-duty distortions filtering through, the housing recovery risks stalling just as it was gaining momentum. For the remainder of 2025, policy clarity and rate stability will be crucial if the market is to regain confidence and maintain growth.
