Home buyer interest and property sales have declined for the third consecutive month, as prospective purchasers continue to adjust to the recent changes in stamp duty relief, according to the latest figures from the Royal Institution of Chartered Surveyors (Rics).
The stamp duty holiday, which offered temporary relief to buyers, came to an end on 31 March, with revised – and in some cases, less favourable – thresholds taking effect from April. This has led to a notable cooling in the property market, particularly in England and Northern Ireland, where the tax applies.
Rics reported that a net balance of 33% of property professionals saw a fall in new buyer inquiries in April, compared with those reporting an increase. This marks the third consecutive month of declining buyer interest and highlights growing caution amidst persistent affordability concerns and tighter lending conditions.
In parallel, sales agreed also slumped, with a net balance of 31% of surveyors reporting fewer transactions. This is the weakest reading since August 2023, pointing to a subdued spring season for the housing market, traditionally one of its busier periods.
Despite the current slowdown, market sentiment over the longer term appears more optimistic. A net balance of 17% of surveyors expect sales to rise over the next 12 months, and 39% anticipate house prices will climb, suggesting that confidence may gradually return, especially if economic conditions improve and interest rates ease.
Simon Rubinsohn, Rics’ chief economist, said: “Although geopolitical developments haven’t helped the mood music in the residential market over the past month, the main reason for the dip in the key Rics sales activity metrics lies in the expiry of the stamp duty holiday at the end of March. Near-term expectations indicators suggest the subdued trend will persist for the next few months at least, but looking beyond this, the results are more encouraging, reflecting in part the prospect of deeper interest rate cuts than previously anticipated.”
The lettings market presents a contrasting picture. Tenant demand rose over the three months to April, while landlord instructions continued to fall, signalling a tightening rental market. This imbalance is expected to drive rents higher in the coming months, offering little reprieve for renters already facing affordability issues.
Rubinsohn added: “More problematic is the negative feedback in the survey around supply in the rental market. With demand continuing to grow, there appears little relief in store for tenants in terms of the upward pressure on rents.”
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Tom Bill, head of UK residential research at Knight Frank, said: “Despite a predictable lull in April following the stamp duty cliff edge, demand in the UK housing market is relatively robust. The tariff turbulence means the Bank of England is expected to cut rates more quickly, which means more sub-4% mortgages have appeared – although demand would falter if things got too bumpy.”
Jeremy Leaf, a north London estate agent, noted a surge in tenant inquiries but said affordability remains a barrier. “Over the past month or so, we have noticed considerably more tenant interest but a resistance to paying higher rents. However, lack of supply, particularly of one and two-bedroom flats in more popular areas, often prompted by landlords deciding not to renew, is preventing a more marked downturn in values.”
As the market adjusts to the new stamp duty regime and economic uncertainty continues to weigh, analysts suggest it may be some months before confidence fully returns to both buyers and sellers. The potential for interest rate cuts later in the year, however, could offer the boost the housing sector needs.
