There are “tentative signs” that the housing market in England and Wales is recovering from a months-long slowdown after uncertainty around the autumn budget and economic pressures, estate agents and surveyors have reported.
The Royal Institution of Chartered Surveyors (Rics) said its members were feeling more optimistic about the year ahead than at any time since December 2024, as inquiries from new buyers, agreed sales and house prices became less negative in January.
A monthly survey of chartered surveyors in England and Wales showed a net balance of 35% of Rics members expect an increase in house sales over the next 12 months. The index measures the difference between the share of agents reporting rising and falling optimism.
Demand from new buyers was still down, however, with a net balance of -15% of respondents saying they had seen a further decrease in inquiries in January, but Rics said this figure showed “diminished negativity”, after a reading of -21% in December and -29% in November.
Similarly, the volume of agreed sales improved, with net balance of -9%, which was the least negative reading since June 2025. House prices have also reached a “potential turning point”, the Rics survey said. Although more agents reported falling rather than rising house prices over the past three months, with the house price gauge standing at -10%, this was up from a low of -19% in October.
Simon Rubinsohn, the chief economist at Rics, said: “There are early signs that market conditions may be improving after a challenging period, although activity levels are still subdued, meaning any recovery is likely to be gradual.”
Estate agents and surveyors had reported that activity in the housing market slowed considerably in the months leading up to the autumn budget at the end of November, due to uncertainty over what taxes may be applied to property transactions. This included fears of changes of stamp duty and capital gains taxes being paid on some primary residences, although neither measure was eventually announced in the budget.
While some estate agents have reported a “new year bounce” in activity since the budget, many also report continued concerns from buyers about economic uncertainty, interest rates and cost of living pressures.
Rubinsohn said: “Whether this tentative improvement develops into sustained momentum will depend heavily on the trajectory of mortgage rates and broader macro confidence over the coming months.”
The property developers Barratt Redrow and Bellway also reported “subdued” activity in the months leading up to the autumn budget in their latest financial results this week.
Barratt Redrow, the UK’s biggest housebuilder, cut its dividend on Wednesday and reported a 13.6% drop in underlying pre-tax profits to £199.9m in the six months to the end of December. It said that over this time it had found “consumer confidence remained low, economic and political uncertainty was high, and affordability challenges remained an issue for many customers”. The housebuilder said it had completed 7,444 homes in the period and expected a total of between 17,200 and 17,800 across the year.
Similarly, the housebuilder Bellway said that customer demand throughout the autumn “was impacted by uncertainty ahead of the government’s budget”. In a trading update for the six months to the end of January released on Tuesday, it said that it had completed 4,702 homes, a 2.7% increase from 4,577 in the same period in 2025.