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Britain's housing-market weakened in March as tax-incentives ended and economic concerns grew, according to a Royal Institution of Chartered Surveyors (RICS) survey. New buyer enquiries dropped to a net balance of -32, the lowest since September 2023, down from -16 in February. Agreed home sales also declined. The end of the stamp duty break and negative global developments, including potential trade tensions from U.S. tariffs, worsened sentiment. RICS' house price balance fell to +2, the weakest since August 2024, missing forecasts of +8. While prices may decline short-term, surveyors expect modest growth over the next year despite market uncertainty.
The momentum in Britain's housing market faltered in March following the conclusion of tax incentives that had previously bolstered buyer demand. According to the Royal Institution of Chartered Surveyors (RICS), interest from prospective buyers dropped sharply, with their index of new buyer enquiries falling to a net balance of -32, the lowest level since September 2023. This marked a significant decline from February's figure of -16. Advertisement
This loss in market activity was further reflected in a decline in agreed home sales, which sank deeper into negative territory, indicating reduced transaction volumes. The downturn coincided with the government's recent move to lower the price threshold for stamp duty - the property purchase tax - increasing the tax burden on buyers and deterring new entrants into the market.
Simon Rubinsohn, RICS' chief economist, acknowledged that the expiration of the stamp duty break had been expected to dampen sales temporarily. However, he noted that the pullback in demand appeared more pronounced due to a combination of discouraging economic signals. "The shift in sentiment has been aggravated by the slew of negative macro newsflow over the past few weeks," Rubinsohn stated.
Adding to the uncertain outlook, international developments such as potential retaliatory tariffs in response to U.S. President Donald Trump's trade policies were flagged by RICS as contributing factors to the growing unease in the market. These concerns have raised fears of further economic disruption, both domestically and globally, which may weigh on buyer confidence in the near term.
The survey's findings were consistent with other indicators of a housing slowdown. Recent Bank of England data revealed a decline in mortgage approvals in February, further confirming that buyer appetite had weakened ahead of the end of fiscal incentives.
House price expectations also softened. RICS' house price balance - which measures the difference between the proportion of surveyors reporting price increases and those reporting decreases over the past three months - slipped to +2 in March. This was the lowest reading since August 2024 and a notable drop from +11 in February. Analysts surveyed by Reuters had anticipated a more moderate decline to +8, suggesting the slowdown caught some observers off guard.
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