Is the UK Housing Market Starting to Recover?

After months of gloomy headlines and weekends at estate agents’ offices, the UK housing market is finally showing faint signs of life.

According to a new report from the Royal Institution of Chartered Surveyors (RICS), June marked the first month this year when new homebuyer enquiries rose rather than fell. It is not a boom, but after six straight months of declining demand, even a modest uptick feels like a shift.

The numbers themselves are hardly dramatic. A net balance of 3% of property professionals said they saw more buyer interest than they did the previous month. Still, that is a clear change from May, when 22% reported a drop in enquiries. It is also the first time since December 2024 that demand has climbed out of negative territory.

What Do Housing Sales Figures Indicate?

While there is some buzz around rising interest, that optimism has not yet translated into more transactions. Surveyors expect sales momentum to stay sluggish in the near future. Most predict a flat year ahead when it comes to volumes, meaning people might be looking, but they are not necessarily buying.

New instructions from sellers also dipped slightly in June. Only 3% of agents reported an increase in listings, down from 7% the previous month. That suggests sellers are holding back, perhaps waiting for better conditions or clearer signals from the market.

Still, there are signs that stock levels may not dry up entirely. A notable 16% of professionals reported more market appraisals—those initial conversations where homeowners ask for a property valuation, compared with last year. It is a subtle hint that supply could pick up down the line.

Prices See a Mixed Bag

On the pricing front, the picture remains patchy. Nationally, a small majority of surveyors (net balance of 7%) said house prices fell in June. But as always, the UK housing market is more of a patchwork than a monolith.

While regions like the South East, East Anglia, and London saw sharper price falls, other parts of the country such as Northern Ireland, the North West, Scotland and the East Midlands reported healthy gains.

Looking ahead, short-term expectations remain cautious. However, when surveyors were asked to look a year out, nearly a quarter (24%) said they expect prices to rise. That is not a boom forecast, but it points to some growing confidence.

Stamp Duty’s Lingering Hangover on the UK Housing Market

Part of the reason for the recent lull in activity stems from April’s stamp duty changes. In the lead-up to the deadline, many buyers rushed to complete transactions early, effectively bunching up demand into the first quarter of the year. The market is still digesting that rush, but the June numbers suggest that the dust may finally be settling.

According to RICS, the earlier “distortion” from the stamp duty deadline is fading, which is allowing real trends to come through. Near-term sales expectations have begun to edge higher, but confidence remains delicate, with economic uncertainty still casting a shadow.

That uncertainty comes in many forms, from high interest rates to fears of a broader economic slowdown, both at home and abroad. Buyers, understandably, are treading carefully.

What’s the Situation for Landlords & Tenants?

Meanwhile, the lettings market continues to tell its own tough story. Tenant demand has remained mostly flat, but the number of landlords exiting the market is on the rise. A net balance of 24% of property professionals reported fewer landlord instructions in June.

That shrinking supply is keeping the pressure on tenants. Rents are rising and they are expected to keep climbing. This is putting tenants in a bind.

Landlords continue to pack up and leave the business, so there’s still real competition for properties. This is the last thing tenants want to hear, because their finances are already so stretched. Data shows that renters, on average, have only enough savings to cover two and a half months of essential expenses. That is well below what would be needed to handle an emergency or sudden job loss.

In contrast, homeowners with mortgages have around six months of buffer money, meaning they are in a better position to ride out economic bumps.

Are Better Days on the Horizon for UK Housing?

For buyers sitting on the fence, the big question is whether prices will fall further or whether they risk missing the bottom. Some analysts think the latter is more likely.

One expert believes demand is slowly recovering, helped by growing expectations of interest rate cuts in the second half of the year. “With more stock to choose from, prices are under pressure now,” he said, “but modest single-digit growth looks likely in 2025.”

He flagged one wild card, though: the next government budget, i.e, Autumn Budget 2025. Last year’s pre-budget speculation spooked the market, and a repeat performance could rattle confidence again.

Conclusion: What Now?

For first-time buyers, the current climate may feel confusing. On one hand, demand is picking up, and mortgage rates might ease later this year. On the other hand, prices remain uneven and economic uncertainty is keeping many would-be buyers cautious.

Still, the fact that enquiries are rising again after a long, cold stretch is a sign that people are beginning to poke their heads back into the market. No one is shouting from the rooftops. But they are knocking on a few more doors.