Spurred on by the recent decrease in mortgage interest rates. Buyer demand and sales activity are on the rise, with industry professionals anticipating further growth as we move into the final quarter of the year.

August’s survey results show a rise in the number of people looking to buy homes, with a net balance of +15 of respondents noticing an improvement in this survey indicator (+4 in July).

House prices are starting to increase after almost two years of decline with August’s survey showing that prices have moved into positive territory for the first time since October 2022, with a net balance of +1 and with +14 of respondents predicting a steady rise over the next three months.

On the supply side, the number of new property listings has seen a modest increase (+7 up from +3 in July), with reports on the volume of appraisals taking place suggesting this will continue to increase, improving the choice for new buyers.

In the rental market, tenant demand continues to remain positive, although the pace of growth has slowed compared to previous months. The net balance of +11 in August is lower than the +26 recorded in July, but still reflects steady interest from renters.

On the other side, the supply of rental properties remains sluggish, with new landlord instructions falling again. The net balance for new rental listings dropped to -21, from -9 last month.

This ongoing shortage of rental properties is expected to keep pushing rents higher. Near-term rental price expectations also remain heightened, with a net balance of +39 of survey respondents predicting that rents will increase in the coming months.

Commenting on the lastest data Rics chief economist Simon Rubinsohn said:

“The latest RICS survey captures an improvement in sentiment over the past month in the wake of the modest decline in mortgage rates with buyer interest improving, albeit from a relatively low base, and stock levels edging up.

“However, anecdotal remarks from respondents still demonstrate the need for realistic pricing to get deals done with uncertainty both around the scope for further interest rate cuts and the likely contents of the forthcoming Budget keeping the mood in check.”

MT Finance director Tomer Aboody agreed that market sentiment had noticeably improved as mortgage rates have started coming down, following the reduction in the base rate.

“We are seeing a higher level of transactions as more properties come onto the market and there is an increase in buyers prepared to take the plunge thanks to lower mortgage rates. Although this uplift is positive, admittedly we are starting from a low base line since the housing market has been pretty stagnant over the past couple of years.”

He added: “If the Budget does prove to be as bad as many fear, this could result in a subdued market reaction. Hopefully, a rate reduction will also be on the cards, which would help boost activity and sentiment.

Hargreaves Lansdown head of personal finance Sarah Coles said: “House prices have picked up in August, after the RICS survey showed a dismal pattern of decline ever since the mini-Budget two years ago. It’s a positive sign of healthy activity in the market, but it comes with a sting in the tail. A combination of relatively high mortgage rates and higher house prices are going to keep pricing some people out of the market and persuade some buyers to overstretch themselves.”