Buyer demand weakened in September as fears over rising interest rates weighed on confidence, the latest Royal Institution of Chartered Surveyors survey reveals.

The net balance for new buyer enquiries fell to -22%, from -18% in August, marking the first dip since March, although it was much stronger than the recent low of -41% recorded six months ago.

RICS measures the proportion of surveyors reporting a rise minus the proportion reporting a fall, so a negative balance shows more respondents are seeing declines than increases.

Agreed sales also remained under pressure, with the net balance slipping to -18% from -16%, although this was an improvement from the three-month average of -25%.

There were some signs of improving supply, as the balance for new sales instructions rose to +6%, its first positive reading since mid 2025.

House prices also came under renewed pressure during September, with the headline net balance falling to -32% from -28% in August.

This brought to an end four consecutive months in which the measure had become progressively less negative.

Most regions of England recorded weaker price balances, with London notably more negative than the national figure.

By contrast, prices continued to rise in Northern Ireland, while Scotland recorded modest growth.

The three-month house price expectations balance stood at -24%, indicating surveyors expect further downward pressure in the near term.

Over the next 12 months, however, the balance was zero, suggesting respondents expect house prices to remain broadly flat.

The lettings market presented a different picture, with tenant demand continuing to rise while landlord supply remained constrained.

A net balance of +23% of respondents reported an increase in tenant demand, marking the third consecutive monthly acceleration.

Expectations for rental growth also remained elevated, with a net balance of +37% expecting rents to rise over the next three months.

This was down from +44% in August but remained well above the +27% average recorded during the first half of the year.

RICS head of market research and analysis Tarrant Parsons says: “A renewed rise in interest rate expectations has created a fresh headwind for the housing market, with buyers becoming a little more cautious and sales activity losing some momentum this month.

“Even so, the latest results do not point to any significant shift in direction.

“Rather, they suggest the market may need to contend with a somewhat longer period of subdued activity as households adjust to the prospect of borrowing costs remaining higher than previously anticipated.”

Moneyfactscompare.co.uk finance expert Rachel Springall says: “Prospective buyers remain cautious about making a large financial commitment.

“Higher mortgage rates and the rising cost of living are creating a painful affordability squeeze for new buyers.

“The punishing rise in fixed mortgage rates has meant a typical mortgage repayment is almost £2,000 more per year compared with the start of 2026.

“Those who can afford to buy have more bargaining power when demand remains weak and house prices are under pressure, but higher mortgage rates risk undermining that affordability boost.”

Shawbrook sales and distribution director for retail mortgages Louise Apollonio says: “Buyers don’t need to predict the next rate move; they need to know what they can afford.

“The latest figures show uncertainty around borrowing costs is weighing on demand, and it’s understandable that people are thinking carefully before committing, particularly in areas such as London where affordability is already stretched.

“While the near-term outlook remains subdued, expectations over the next year point to a more stable market.”