The Royal Institution of Chartered Surveyors’ (RICS) UK Residential Property Survey for March found that activity faded at the end of the month.
Respondents to its survey said buyer demand fell to its weakest level since September 2023.
Agreed sales activity also slipped to its lowest level since the end of 2023.
In the near term, market professionals expect sales to decline further for the next three months. Further ahead, sentiment for the housing market in 12 months’ time was less negative, as 11% of respondents predicted sales volumes to rise.
Despite this, the 12-month outlook has softened over the last few months, and the prediction made in March was the least optimistic over the last 16 months.
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More properties listed as house prices flatten
Although sales activity was weaker, respondents to the RICS survey said supply was continuing to rise.
Market appraisals also continued to be healthy and higher than the same period in 2024.
Respondents said that house prices showed flat growth and they predicted a decline in the coming months, although 12-month house price expectations were more positive.
RICS said uncertainty around US global tariffs and the responses to that may impact the housing market in the future.
Simon Rubinsohn, chief economist at RICS, said: “The expiry of the stamp duty break was always going to lead to a pause in activity in the sales market. However, the latest results, and indeed the anecdotal remarks from respondents to the survey, suggest that the shift in sentiment has been aggravated by the slew of negative macro news flow over the past few weeks.
“Looking forward, the impact on the market will in no small part depend on how the economy is affected by the emerging trade war and the response of the Bank of England to the shifting environment. For now, it is noteworthy that the longer-term RICS expectations metrics are still relatively resilient, but they have the potential to be blown off course if the tariff headwinds intensify.”
Tomer Aboody, director of MT Finance, added: “We are seeing a slowdown in the market, which correlates with the stamp duty changes, as well as further negative feelings within the macro and UK economic climate. This further proves that some assistance from the government is needed in order to stimulate growth.
“Hitting the UK with higher taxes, higher stamp duty along with businesses taking further hits from the October Budget, has provided so much uncertainty and this slowdown. Let’s hope there are some positive changes to come.”
Rental demand up for first time in five months
Rental demand rose in March, the first month an increase was recorded since October.
In contrast, respondents reported a fall in landlord instructions.
Jeremy Leaf, North London estate agent and a former RICS residential chair, said: “With lettings, we have found demand has been supported over the past few weeks at least by aspiring first-time buyers who were unable to profit from the stamp duty concession before it disappeared who were now looking to re-let.
“However, the continuing lack of stock and slow increase in the number of landlords wanting to sell has exacerbated the supply/demand imbalance and keeping rents up despite affordability concerns.”