Residential Property Review – March 2026

The UK housing market is struggling to gain momentum as geopolitical tensions cause uncertainty about what’s on the horizon.

According to the latest survey from RICS, new buyer enquiries declined further in February, falling to a net balance of -26%, down from -15% the previous month.  Agreed sales slipped slightly too, posting a net balance of -12%.

The recent outbreak of war in Iran has affected the short-term outlook, with near-term sales expectations dropping to -2%, the weakest reading since last November. The current longer-term outlook is a little more positive, with a net balance of 17% of respondents expecting sales activity to rise over the next twelve months.

The full economic impact of the Middle East conflict remains to be seen, but the mortgage landscape was muted before tension escalated. According to the Bank of England, only 60,000 mortgage approvals were recorded in January, down on the six-month average of 64,100. 

Competition for rental properties has slowed to a six-year low, according to Zoopla.

Supply and demand are becoming slightly more balanced across the rental market. In March, tenant demand was 14% lower than the previous year, while the number of available properties rose by 11%. This increase in supply may be due to more renters getting on the property ladder, therefore freeing up their homes. As a result, competition among renters is easing, with the number of enquiries per property falling annually from 6.5 to 4.8. This is the lowest level for six years but is still double the pre-pandemic average.

The relative improvement in rental conditions has helped to slow the pace of annual rental growth to 1.9% in March, down from 2.8% the previous year. There is some regional variation, with northern cities such as Liverpool and Newcastle showing stronger growth of 4.6% and 4.5% respectively.

Research from Yopa indicates that about 70% of local housing markets are in recovery.

The national picture for house price growth may be muted, but analysis of local authorities suggests that the landscape may be shifting upwards. Of the 359 districts analysed, 241 show monthly house price increases. Some of the strongest rebounds were seen in areas such as South Ayrshire, North Cambridgeshire and Northumberland. Meanwhile, the most expensive areas continue to see homes decrease in value – this is particularly evident in London, where Kensington and Chelsea, Camden, and Hammersmith and Fulham are among those seeing notable price declines.

Verona Frankish at Yopa commented, “After a difficult couple of years shaped by economic uncertainty and rapidly rising mortgage rates, conditions have undoubtedly been challenging… the fact that most Local Authorities are already in recovery demonstrates that the market is not in decline, but in transition.”

All details are correct at the time of writing (24 March 2026)

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