Home buyer inquiries and sales fell in April, after a stamp duty holiday expired and as economic uncertainty continued to weigh on confidence, surveyors have reported.
Stamp duty discounts became less generous for some home buyers from April 1. Stamp duty applies in England and Northern Ireland.
The Royal Institution of Chartered Surveyors (Rics) said that new buyer interest declined for the third month in a row, with a net balance of 33 per cent of property professionals reporting a fall in inquiries rather than an increase.
This reflects growing caution from prospective buyers alongside affordability pressures and tight borrowing conditions, Rics said.
A net balance of 31 per cent of property professionals saw a fall in sales agreed rather than a rise.
This was the weakest figure recorded since August 2023, pointing to a subdued spring market, the report said.
More positively, a net balance of 17 per cent of surveyors expect sales to rise over the year ahead.
A net balance of 39 per cent of professionals expect house prices to increase over the year ahead.
Rents set to rise
Looking at the lettings market, tenant demand increased in the three months to April according to the report, while a decline in new landlord instructions remained evident, suggesting that rents will rise over the next few months.
Rics chief economist Simon Rubinsohn 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.
“More problematic, however, 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.”
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 per cent mortgages have appeared although demand would falter if things got too bumpy.”
Jeremy Leaf, a north London estate agent, said: “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.”
