The housing market in England and Wales is showing some hopeful signs of recovery after several months of stagnation, largely attributed to the uncertainty surrounding the autumn budget and various economic pressures. This is a positive development that many are eager to explore further.
According to the Royal Institution of Chartered Surveyors (RICS), there’s a growing sense of optimism among its members about the upcoming year, marking the highest level of enthusiasm since December 2024. January brought a slight improvement in new buyer inquiries, confirmed sales, and house prices—leaving many wondering if this could signal a more robust recovery.
A monthly survey conducted among chartered surveyors revealed that about 35% of RICS members anticipate an increase in house sales over the next year. This figure represents a net balance, indicating a difference between agents who feel optimistic versus those who do not.
However, it’s important to note that interest from new buyers remains weak. A net balance of -15% of respondents indicated that they had experienced a further decline in inquiries during January. Nonetheless, experts from RICS interpreted this as a sign of “diminished negativity,” which is an improvement from the more severe readings of -21% in December and -29% in November.
Additionally, the number of agreed sales has also seen an uptick, with a net balance of -9%, marking the least negative result since June 2025. The RICS survey suggests that house prices might be nearing a crucial turning point. While a greater number of agents reported declines in house prices over the past three months, the house price gauge improved slightly from a low of -19% in October to -10%.
Simon Rubinsohn, RICS’s chief economist, commented on this trend, stating, "There are initial signs that market conditions might be on the mend following a difficult period, though current activity levels are still subdued. Therefore, any potential recovery is likely to proceed gradually.”
Leading up to the autumn budget at the end of November, estate agents and surveyors noted a significant slowdown in housing market activity. This downturn was primarily caused by uncertainty regarding potential tax changes affecting property transactions, like fears surrounding stamp duty and capital gains taxes on primary residences. However, it’s worth noting that such changes were not introduced in the budget.
Despite some estate agents reporting a resurgence in activity at the start of the year, many buyers continue to express concerns regarding economic instability, rising interest rates, and the pressures of living costs.
Rubinsohn further stated, "Whether this tentative uptick transforms into sustained growth will largely depend on the direction of mortgage rates and overall economic confidence in the coming months.”
Property developers Barratt Redrow and Bellway also acknowledged the subdued activity in the lead-up to the autumn budget in their recent financial results. Barratt Redrow, the largest housebuilder in the UK, announced a reduction in its dividend on Wednesday and revealed a 13.6% decrease in underlying pre-tax profits, amounting to £199.9 million for the six months ending December. They noted that consumer confidence remained low, with significant economic and political uncertainties, alongside affordability challenges for numerous customers. During this timeframe, they successfully completed 7,444 homes and projected a total completion of between 17,200 and 17,800 homes for the year.
Similarly, Bellway highlighted that customer demand throughout the autumn months was affected by uncertain expectations leading up to the government’s budget. In their trading update for the six months ending in January, they reported completing 4,702 homes—a 2.7% increase compared to 4,577 homes during the same period in 2025.
In conclusion, while there are optimistic indicators suggesting a possible recovery in the housing market, the road ahead appears to be fraught with challenges. Will these early signs of improvement translate into a durable rebound, or are we looking at a temporary blip? What are your thoughts on the current state of the housing market? Share your perspectives in the comments!
