Tenant demand growth accelerated for a third consecutive month in the latest RICS UK Residential Market Survey.
A net balance of +23% of respondents reported an increase in tenant demand, based on the non-seasonally adjusted monthly lettings dataset. Landlord instructions remained subdued, with the corresponding net balance still negative.
Contributors' rent expectations also stayed positive. A net balance of +37% expects rents to rise over the next three months, down from +44% in August but above the +27% average for the first half of the year. RICS net balances measure how widespread a view is among surveyors rather than the size of any move.
Rental picture tied to landlord exits
"Inflation, stamp duty, and taxes are all biting, and the impending budget is making buyers and sellers nervous," said Mark Lewis of Symonds & Sampson in Dorset. "The million-plus market remains a challenge and buy-to-lets are virtually non-existent. Our lettings department says that prospective tenants outnumber landlords ten to one."
Surveyors in Cardiff and Brecon reported continued shortages of rental properties, while a South Devon contributor said rents are edging up slightly because many landlords have exited buy-to-let. A Glasgow surveyor offered a contrast, describing a soft rental market in which rents often sit at or below levels set some years ago, although supply remains constricted as landlords leave. In Belfast, contributors described tenant demand as strong, particularly for two- and three-bedroom properties.
Renters' Rights Act continues to impact the market
"Headline rents and tenant demand appear robust," says William Delaney of Coopers of London in central London. "But we are starting to see the consequences of the Renters' Rights Act. Increasing rents due to lack of supply, and increased tenant costs due to the need to use guarantor companies in many cases. Possession claims wait 12 to 18 months for a hearing."
"Some 'accidental' landlords have sold mainly due to Renters' Rights Act worries," noted Jeremy Leaf of Jeremy Leaf & Co in Finchley. "Lack of new landlords to take their place & reduction in quality is adding to unease. Resultant lack of choice, especially family houses, means rents have hardened provided affordability is not unduly threatened."
Sales
The sales side of the survey weakened as higher interest rate expectations halted a run of improving readings, although most measures remain better than their lows earlier in the year. The September survey drew 193 responses covering 422 branches.
The new buyer enquiries balance slipped to -22% from -18%, the first month since March 2026 in which the indicator failed to become less negative. It remains well above the -41% low recorded six months ago. Agreed sales posted -18%, weaker than the previous -16% but better than the three-month average of -25%, and near-term sales expectations eased to -6% from -3%.
New instructions gave the one stronger reading. A net balance of +6% of respondents reported more sales listings, the first positive reading since mid-2025. The rise is modest, however, and contributors said the volume of market appraisals remains below the level of a year ago.
The headline house price net balance slipped to -32% from -28%, ending a run of four consecutive months of improvement. Most English regions moved slightly deeper into negative territory in September, with London notably weaker than the national reading. Prices continue to rise in Northern Ireland, and Scotland reports modest growth.
Near-term price expectations stand at -24% for the next three months. The 12-month net balance of zero points to a broadly flat trend, a downgrade from a couple of months ago, when respondents still anticipated modest price growth.
Rachel Springall, finance expert at Moneyfactscompare.co.uk, said, “Tenant demand is gathering pace, with the +23% net balance marking a third consecutive month of acceleration, while landlord instructions remain scarce, piling further pressure on an already squeezed rental market.
"Those who plan to buy their own home in the future may put their plans on hold and remain in the private rental sector for longer as mortgage rates remain high, adding further pressure to tenant demand. With a net balance of +37% expecting rents to rise over the next three months, tenants looking for an affordable rental property could face fierce competition if the supply of private rental homes becomes available.
“House prices are under renewed pressure, with the RICS house price balance slipping from -28% to -32% in September. The near-term outlook remains weak, with further downward pressure expected over the next three months. However, expectations over the next 12 months point towards a broadly flat market.
"This follows the latest Nationwide House Price Index showing annual house price growth halved from 1.6% in August to 0.8% in September, underlining just how weak the housing market has become. However, conditions vary considerably across the UK, and softer house prices could present an opportunity for some prospective buyers if they can overcome the affordability hurdle of higher mortgage rates.
“Attention will now turn to the October Budget and the Government’s new Your First Home scheme, which could provide some welcome support for prospective first-time buyers. However, it comes at a challenging time for a fragile housing market, with weak buyer demand, higher mortgage rates and stretched affordability weighing on activity. One scheme alone will not turn the market around, and improving affordability and housing supply will be vital if market conditions are to improve.”
