Renewed volatility tempers early-year optimism in housing market

The report highlights a mixed picture across key sectors. In the sales market, demand picked up early in the quarter but cooled in March, with transactions holding steady as buyers relied on previously secured mortgage deals. London and the South East led activity, driven by first-time buyers, while affordability pressures persist at the top end.

In the rental market, demand is rising again after easing in 2025, pushing rents higher amid limited supply. Landlords are restructuring portfolios rather than exiting, with stronger resilience seen in higher-yielding northern regions.

The mortgage market has seen rapid shifts, with rates briefly falling before rising sharply. This prompted borrowers, particularly those remortgaging, to act quickly, bringing forward activity as households prioritise affordability.

On energy efficiency, nearly half of homes improved their EPC rating last year, but progress is slowing as properties approach higher standards. Costs and practical limits are emerging, while upcoming reforms may complicate property valuations.

The report also finds that, ten years on, the second-home stamp duty surcharge is increasingly constraining housing supply by reducing investor demand and weakening development viability.

Overall, the market remains active but cautious, with affordability pressures and economic uncertainty shaping a more measured recovery.

The full brief can be read here.