UK housing market near turning point says chief economist

“The UK housing market could be approaching a turning point,” says Simon Rubinsohn, chief economist at the Royal Institution of Chartered Surveyors (RICS), as new survey evidence suggests buyer enquiries are picking up after a prolonged slowdown.

His comments follow the publication of RICS’s February 2026 Economy and Property Market Update, which points to improving sentiment and a possible upward move in prices and activity over the months ahead.

Rubinsohn tells Jewish News that while the signals remain tentative, they are at least “moving in the right direction.

“The prospect of further interest rate reductions following the ‘dovish hold’ by the Bank of England in February is certainly supportive for the market,” he says. “I wouldn’t be surprised to see two, maybe three, more cuts through the course of the year.”

Rubinsohn noted that it may take time for this to feed through fully into mortgage pricing, but said borrowing costs should gradually ease.

“It may take a little longer for this to feed through into mortgage rates but borrowing costs should gradually ease,” he adds.

The wider economic backdrop remains subdued. The RICS report noted that UK GDP rose by just 0.1 per cent in the final quarter of 2025, leaving full-year growth at 1.3 per cent, underlining the fragile nature of the recovery.

Despite the tentative improvement in national indicators, the report highlighted sharp regional divides. Northern Ireland continues to record the strongest price momentum across the UK, with parts of Scotland and the North of England also holding up well. London, by contrast, remains the weakest region, with negative readings still evident in both RICS and Land Registry data.

Online property platform Zoopla, also cited in the report, points to a modest return in confidence, although demand remains around 9 per cent lower than at the strong start to 2025.

Affordability pressures, however, remain a major constraint, particularly for first-time buyers. Rubinsohn warned that even if mortgage rates ease, deposits continue to pose a significant barrier for those trying to take their first step onto the housing ladder.

“Affordability, particularly the finding of a deposit, remains a challenge for those looking to take their initial step onto the property ladder.”

With the government committed to delivering 1.5 million new homes, Rubinsohn said it will be worth watching whether further measures to support first-time buyers are introduced in the months ahead.

The lettings market is also showing signs of adjustment. RICS reported only a modest rise in tenant demand, but supply constraints remain persistent. Zoopla figures suggest rental inflation on new lets is running at just over 2 per cent, well below the peak of around 12 per cent seen in 2022 and early 2023.

RICS noted that uncertainty remains over the longer-term impact of the Renters Rights Act, warning that further landlord exits could place renewed upward pressure on rents.

Overall, the report suggests that while the market has not yet entered a full recovery, the forward-looking indicators are now pointing towards firmer conditions over the year ahead, with expectations for both prices and sales activity improving to their strongest levels since late 2024.

For now, Rubinsohn said the mood is one of cautious optimism, with the housing market potentially beginning to turn a corner, even if challenges around affordability and supply remain unresolved.