The UK February RICS housing survey balance stood at +11, lower than the expected +20.
This figure represents a decrease from the prior reading of 22, which has been revised to 21.
This is the lowest reading observed since September, with home buyer demand at its lowest since November 2023.
Housing Market Momentum
The housing market appears to be losing momentum, with the decline in the survey balance suggesting that demand is softening more than anticipated. A reading of +11 still signals growth, but at a much weaker pace than previously thought. Forecasts had pointed to a stronger figure, yet the reality indicates otherwise. The adjustment to last month’s data, from 22 to 21, adds further weight to the argument that conditions are not as robust as they were in recent months.
With buyer interest at its lowest since November, sellers may face increasing pressure. If demand continues to slide, price strength could weaken in the near term. Lower demand tends to give prospective buyers more leverage when negotiating, which may lead to adjustments in asking prices. Although it is too soon to draw long-term conclusions from a single reading, the trend warrants attention.
Market participants should take note of what this means beyond residential sales activity. When fewer buyers are entering the market, it can have a ripple effect across related industries. Mortgage activity, construction planning, and consumer spending tied to home purchases could all experience knock-on effects. The difference between expectations and actual readings suggests that estimates of housing resilience may have been too optimistic.
Future Outlook
We must now consider whether this is a temporary dip or the start of a more prolonged slowdown. If lending conditions tighten or buyers hesitate due to broader economic concerns, this pattern could persist. However, should external conditions improve, demand may stabilise. The coming data releases will provide further clarity on whether this was an isolated shift or a more entrenched development.
