House prices have stayed flat in March, as effects caused by changes to Stamp Duty have petered out
The RICS property survey March 2025 shows that buyer enquiries and agreed sales have stayed in the negative territory.
Changes to stamp duty caused a rush in completing sales before the April 1 deadline.
The RICS property survey March 2025 reveals more caution
Housing market professionals are taking a more reserved approach in the near-term, while long term projections are currently still positive.
New buyer demand has fallen to a net -32%, down from net -16% the previous month, as March saw the weakest demand sentiment since September 2023. Year on year, March is down to -32% from -13% the previous year.
Three-month sales expectations show a higher likelihood of further decreases in activity in the near future, but with +11% of survey participants expecting sales volumes to rise, the longer term retains more positivity.
The RICS property survey March 2025 also shows a net balance of +2% in house price sentiment, which remains positive but is down from +11% in February, and the healthy +20% level it saw in January.
Tenant demand grew to net +20%, the first time since October 2024 where lettings demand increased. Landlord instructions fell to net -24%, and letting demand increased while supply fell to leave a net +31%.
“The impact on the market will in no small part depend on how the economy is affected by the emerging trade war”
The results for April will be under scrutiny as the impacts from Donald Trump’s global trade tariffs affect the UK markets.
RICS chief economist, Simon Rubinsohn, said: “The expiry of the stamp duty break was always going to lead to a pause in activity in the sales market. However, the latest results, and indeed the anecdotal remarks from respondents to the survey, suggest that the shift in sentiment has been aggravated by the slew of negative macro newsflow over the past few weeks.
“Looking forward, the impact on the market will in no small part depend on how the economy is affected by the emerging trade war and the response of the Bank of England to the shifting environment. For now, it is noteworthy that the longer-term RICS expectations metrics are still relatively resilient, but they have the potential to be blown off course if the tariff headwinds intensify.”
Earlier this month, Donald Trump enacted an Executive Order putting unprecedentedly high tariffs on many countries in global trade, including an extra 10% tariff for the UK, 20% for the EU, and China with 54%.
The situation has since rapidly changed for many, with China currently at a massive 125% tariff. The UK is, as of yet, unchanged.
Brian Berry, chief executive of the Federation of Master Builders, said: “The ongoing economic situation will be of great concern to businesses across the world, with the construction industry no different. The FMB’s State of Trade Survey for Q4 2024 found that approximately 67% of small builders have had to charge higher prices for their services as a result of rising material costs. What is particularly alarming is that 52% of FMB members who experienced rising costs reported lower-than-expected business profits or financial losses, with around 8% saying that rising costs were compromising their business’s viability, putting them at risk of closure.
“A prolonged period of economic uncertainty risks major harm to small builders both in terms of products imported from abroad, and the wider impact on the markets, for example with regards to steel manufacturing. At last month’s Spring Statement, the Chancellor Rachel Reeves placed her hopes for economic growth squarely on the shoulders of the nation’s housebuilders, and it is vital the Government gives the industry the support it needs to help rebuild Britain.”
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