Rent rise expectations strengthen as housing outlook weakens – RICS

Landlords will see the strongest increase in rents since early 2024, with tenant demand growing again as fewer properties come forward to let.

The Royal Institution of Chartered Surveyors (RICS) October survey also says that house prices and buyer demand look set to fall.

Its research puts the net balance of members expecting rents to rise over the next three months at +41%, up from +29%.

Tenant demand returned to modest growth on the quarterly, seasonally adjusted measure.

Its net balance rose to +7% from -1%, while landlord instructions remained negative at -30%.

House prices fall

The house price balance fell to -36% from -34%, its second consecutive monthly decline following signs of stabilisation over the summer.

London, East Anglia, the West Midlands and the South East recorded weaker price trends than the UK figure, although prices continued to rise firmly in Northern Ireland and more modestly in Scotland and the North West.

For the year ahead, the price expectations balance dropped from zero to -17%, with separate percentage estimates pointing to a fall of around 1%.

Fewer homes were coming onto the sales market, with new instructions falling to -8% from +6%, while the market appraisals indicator reached its lowest since November 2025 at -34%.

Mortgage rates weigh

RICS’ head of market research and analysis, Tarrant Parsons, said: “Home buyer demand remains subdued, and respondents are bracing for a weaker year ahead for sales given the persistent macroeconomic challenges being faced.

“In accordance with this, the Bank of England’s rate rise was accompanied by a clear warning that policy may need to tighten further if higher energy costs feed through into wider prices.”

He added: “With inflation now projected to approach 5% next year, mortgage rates are likely to remain elevated for longer, thereby continuing to weigh on the market.”

Housing sales outlook

Expectations for housing sales over the next 12 months fell to their weakest since July 2023, with a net balance of -17%.

Virtually all parts of the UK reported falling or stagnant buyer demand.

The new buyer enquiries balance remained unchanged at -24%, while agreed sales slipped from -18% to -24%, their weakest reading in three months.

Respondents also expected sales to fall over the next three months, returning a balance of -11%, the survey reveals.