The Royal Institution of Chartered Surveyors’ (RICS) UK Residential Market Survey net balance for new buyer enquiries in April 2026. The RICS Residential Market Survey is a monthly sentiment survey of chartered surveyors operating across the residential sales and lettings markets. A negative net balance implies that more respondents are seeing decreases than increases. Marginally less downbeat than the -40% reading recorded last month. The figure nevertheless continues to point toward weak market momentum, with almost all regions of the UK experiencing a noticeable softening in demand.

Surveyors see sales slow, lettings tighten

The latest RICS Residential Market Survey points toward subdued conditions across the UK housing market. The survey captures sentiment among chartered surveyors rather than direct transaction data, with results expressed as net balances: the difference between respondents reporting an increase and those reporting a decrease.

New buyer enquiries recorded -34% in April, compared with -40% the previous month. Agreed sales stood at -36% and near-term sales expectations at -32%. The house price net balance deteriorated to -34% from -25%, though twelve-month price expectations remained marginally positive at +5%.

The lettings market remains firmer. Tenant demand registered +14% while landlord instructions remained negative at -17%, pointing to continued supply-demand imbalance. Near-term rent expectations stood at +25%.

Developers hold back as costs bite

The National House Building Council registered 26,959 new homes to be built in Q1 2026, down 6% year-on-year. NHBC registrations are a leading indicator of future housing supply, as developers typically register before construction begins and most mortgage lenders require warranty cover on new homes.

Private sector registrations fell 7% to 18,072, while the rental and affordable sector declined 4% to 8,887. The slowdown was uneven across the country. London recorded a 37% decline in registrations, while the North West saw a 27% increase against the broader national trend. Overall, eight of the UK’s twelve regions recorded a fall in registrations during the quarter.

Capital stays selective

Capital continues to flow into UK real estate, although increasingly with a bias toward scale, operational resilience and stabilised income-generating assets. In its trading update published on 13 May 2026, Savills pointed toward a market characterised by cautious transactional activity but continued availability of financing and sustained investor demand for high-quality assets. The group reported greater caution among UK residential buyers and sellers following the escalation of conflict in the Middle East, resulting in longer completion timelines despite stable fall-through rates.

In commercial markets, Savills highlighted constrained supply of prime stock, alongside rising rental values and continued lender appetite for financing. Within Savills’ UK residential business, transactions agreed increased 1% year-on-year in Q1, driven by a 13% increase in the London market, offsetting weaker activity outside London.

Scale continues to attract buyers

The same themes are increasingly visible across listed and corporate transactions. Consolidation within the listed property sector continued this week, with LondonMetric and Schroder REIT tabling a £403m all-share bid for Picton Property Income. The proposed transaction reflects continued appetite for stabilised income-producing assets despite broader market caution.

BTR income remains resilient

Grainger, the UK’s largest listed residential landlord, reported net rental income up 7.8% to £66.1m for the six months to 31 March 2026, with EPRA Earnings rising 4% to £31.4m. Occupancy remained high at 95.9% and like-for-like rental growth of 3.1% was in line with expectations. The group reported a successful transition to the Renters’ Rights Act, which came into force on 1 May, and confirmed it remains on track to deliver its full-year earnings target of £60m. The results provide a further indication of the resilience of operationally managed, income-generating residential assets in the current environment.

Logistics still in favour

Investor demand also remains strong in logistics, a sector that continues to attract capital due to its operational resilience and relatively stable income profile. ICG acquired a portfolio of five UK distribution centres from South African investor Equites Property Fund for £200m, highlighting continued demand for operational industrial assets alongside signs of more selective international capital allocation toward the UK market.

Markets cool on partnerships, government stays committed

The market moved sharply against Vistry following its AGM trading update, then partially stabilised. In this edition of The Long View, we ask whether the initial reaction was justified, and what it tells us about the longer-term prospects for the partnerships model despite a policy environment in which government support remains intact.

During 2023 and 2024, enthusiasm for partnerships-led delivery was high. The £819m Leaf/Sage deal, announced as Vistry completed its strategic shift toward a partnerships-focused model, was described by then chief executive Greg Fitzgerald as evidence that “large-scale delivery commitments like this are a game-changer for getting new homes delivered.”

The market response to Vistry’s AGM trading update on 13 May suggests that confidence has cooled. The update pointed to first-half profit significantly lower than the prior year, higher average net debt, and an increased use of incentives and discounts to clear open market stock. The share price fell sharply in the immediate aftermath before partially stabilising. The immediate cause of the sell-off appears relatively clear. As the industry transitions between affordable housing programmes, with grant notifications under the new 2026-2036 programme not expected until the third quarter, housing association partners have paused new commitments. A model designed to reduce exposure to open market volatility, by anchoring revenue to contracted affordable housing delivery, now finds itself more exposed to that market than it was designed to be.

Critics argue that the partnerships model remains overly tied to the continuity of government affordable housing funding, which itself is subject to spending reviews, political priorities and fiscal pressure. Furthermore, when partnership revenues slow, Vistry has to fall back more heavily on open market sales, despite having spent recent years repositioning the business away from that exposure. The Middle East conflict also continues to place upward pressure on material costs at a time when margins are already under strain.

The pressures facing the model extend beyond the funding gap itself. Many housing associations are under significant financial pressure. Regulatory obligations have weighed on balance sheets across the sector in recent years. Even when grant notifications arrive in the third quarter, the question is not only whether funding is available, but whether housing association partners will have the balance sheet capacity and appetite to commit at the scale the programme anticipates.

Despite these pressures, the policy appetite for affordable housing delivery at scale remains intact. The new affordable housing programme is longer than its predecessor and a substantial signal of political intent. The recent King’s Speech also included both a Remediation Bill and a Social Housing Renewal Bill, reinforcing the government’s stated commitment to affordable housing as a legislative priority. Demand for affordable homes also remains structurally strong, with demand continuing to outstrip supply across most of the country.

The AGM update reaffirmed the board’s commitment to the partnership strategy. Adam Daniels, Vistry’s new chief executive is, however, conducting an operational review with findings due at the interim results in September. The model is facing its first real test, and the operational review may yet identify areas where refinement rather than wholesale strategic change is required. The subsequent stabilisation in Vistry’s share price suggests the market may already be reassessing the initial sell-off. Despite recent market volatility, the underlying thesis, that contracted affordable housing delivery can reduce long-term exposure to open market volatility, remains both structurally credible and politically supported.

The crown speaks on housing

The King’s Speech, delivered on 13 May 2026, set out the government’s legislative programme. Three Bills are of direct relevance to the UK property market.

The Remediation Bill will introduce legislation to speed up remediation works for homes with unsafe cladding. The Bill follows prolonged pressure on the government to accelerate the pace of remediation, which remains a significant constraint on the development and sale of affected residential buildings.

The Social Housing Renewal Bill will introduce legislation to increase long-term investment in social housing. The Bill sits alongside the new Social and Affordable Homes Programme 2026-2036, the government’s long-term funding commitment for the delivery of social and affordable homes.

The Commonhold and Leasehold Reform Bill will reform the leasehold system, including the capping of ground rents. The Bill marks a further step in the government’s ongoing programme of leasehold reform.

Enfield New Town (local elections, 7 May): Labour lost control of Enfield Council following local elections on 7 May, with no single party securing an overall majority. The Conservatives won 31 seats, Labour 27 and the Greens 5. The government’s New Towns consultation, which includes the proposed 21,000-home Crews Hill and Chase Park scheme in Enfield, closes on 18 May.

Kao Data, Park Royal (announced 12 May): Kao Data has announced the acquisition of a 4.7-acre site on the former Frogmore Industrial Estate in Park Royal, West London. The site, acquired from Legal & General business Reassure Limited in March 2026, is intended to be redeveloped into a data centre facility, with detailed proposals to be submitted through the formal planning process. The facility is expected to be operational in 2029. The announcement follows broader institutional interest in UK data centre development, including recent activity linked to Tritax.

Grafton and Eurocell (AGM trading updates, 14-15 May): Trading updates from Grafton and Eurocell point to continued weakness in UK construction materials demand, with Grafton’s Great Britain division down 5% in the four months to April and Eurocell’s Profiles division, which serves the new build and social housing markets, also down 4%. Both companies cited the Middle East conflict alongside weak consumer confidence as factors weighing on demand.

The Early Viewer is for informational purposes only and should not be relied upon as investment, financial or legal advice.