Estate agents and valuers are more pessimistic about sales than at any point since July 2023 as higher mortgage rates weigh on buyer demand, the latest index by the Royal Institution of Chartered Surveyors has found.

The net balance for sales expectations over the next 12 months fell to -17% in October, the most pessimistic reading for more than three years.

RICS net balances measure the proportion of respondents reporting a rise in any given indicator minus the proportion reporting a fall. 

A negative figure therefore means more respondents reported a decline than an increase.

Expectations for sales over the next three months were also negative, with the balance at -11%.

Meanwhile, the new buyer enquiries balance remained at -24%, unchanged from September, with most parts of the UK reporting falling or stagnant demand.

The agreed sales balance weakened to -24% from -18%, its lowest reading for three months.

House prices also remained under pressure, with the headline price balance falling to -36% from -34%.

This marked the second consecutive monthly deterioration following signs of stabilisation over the summer.

London, East Anglia, the West Midlands and the South East recorded weaker price trends than the UK average.

However, prices continued to rise strongly in Northern Ireland, while modest growth was reported in Scotland and the North West.

The balance for house price expectations over the next 12 months fell to -17% from zero, although respondents’ separate percentage forecasts pointed to a more modest decline of around 1%.

The flow of homes coming onto the market also weakened, with new instructions falling to a net balance of -8% from +6%.

The market appraisals balance dropped to -34%, its lowest since November 2025, suggesting the pipeline of new listings could slow further.

In the lettings market, tenant demand returned to modest growth while landlord instructions continued to fall.

On the quarterly seasonally adjusted measure, tenant demand increased to a net balance of +7% from -1%, while landlord instructions stood at -30%.

Rental growth expectations for the next three months rose to +41% from +29%, their strongest level since early 2024.

RICS head of market research and analysis Tarrant Parsons says: “Home buyer demand remains subdued, and respondents are bracing for a weaker year ahead for sales given the persistent macroeconomic challenges being faced.

“In accordance with this, the Bank of England’s rate rise was accompanied by a clear warning that policy may need to tighten further if higher energy costs feed through into wider prices.

“With inflation now projected to approach 5% next year, mortgage rates are likely to remain elevated for longer, thereby continuing to weigh on the market.”

MT Finance founding director Tomer Aboody says higher mortgage and base rates are making buyers more cautious.

He adds: “With another one or two rate rises expected, we anticipate a slowdown in activity in the market.

“However, buyers who are able to afford the higher mortgage payments could find themselves in a strong position to negotiate with sellers due to the slowdown in registered buyer enquiries.”

North London estate agent and former RICS residential chairman Jeremy Leaf says the lack of any near-term improvement is a concern.

He says: “If anything, the most significant influencers of confidence – mortgage rates and the cost of living – are likely to get worse before they improve.”

On lettings, Leaf adds: “Strong demand is accompanied by falling supply partly because landlords who are selling are not being replaced quickly enough by new, or even old, blood.

“As a result, rents are firming up despite continuing affordability concerns.”