Welsh housing market confidence falls as mortgage rates rise
RICS survey shows buyer enquiries, sales and prices all slipping in September, with surveyors warning of a prolonged period of subdued activity as borrowing costs stay high.
Mortgage rates climbing in September have left the Welsh housing market on a cautious footing, with the latest Royal Institution of Chartered Surveyors (RICS) Residential Market Survey showing a sharp dip in buyer interest, sales and price expectations.
Surveyors recorded a net balance of ‑49 per cent of respondents reporting a fall in new buyer enquiries – the lowest figure since November 2025.
On the supply side, the net balance for new instructions to sell slipped to ‑4 per cent, a stark reversal from the +18 per cent recorded in August.
Consequently, newly agreed sales also contracted, with a net balance of ‑13 per cent indicating fewer deals sealed through September.
Pricing trends mirrored the slowdown; a net balance of ‑15 per cent of respondents said house prices had declined over the past three months, down from a +9 per cent rise in the previous survey.
Looking ahead, sentiment remains guarded. A net balance of ‑10 per cent of Welsh surveyors expect house prices to fall over the next three months, while an equal proportion forecast a drop in sales for the final quarter of the year.
“Buyers, though lower in numbers, seem confident in their investment, although they are making lower offers,” said Anthony Filice FRICS of Kelvin Francis Ltd. in Cardiff.
David James FRICS of James Dean in Brecon added, “There are still plenty of sales happening, even though it feels a tougher market.”
RICS head of market research and analysis Tarrant Parsons warned, “A renewed rise in interest rate expectations has created a fresh headwind for the housing market, with buyers becoming a little more cautious and sales activity losing some momentum this month.” Even so, the latest results do not point to any significant shift in direction.
Rather, they suggest the market may need to contend with a somewhat longer period of subdued activity as households adjust to the prospect of borrowing costs remaining higher than previously anticipated.”
The survey’s findings come as the Bank of England’s base rate has hovered near historic highs, pushing mortgage lenders to lift borrowing costs across the UK.
Higher rates have forced many prospective owners to reassess affordability, prompting a retreat in the number of enquiries lodged with estate agents and surveyors.
First‑time buyers, who traditionally drive a large share of Welsh transactions, appear particularly affected, with many citing the prospect of larger monthly repayments as a deterrent.
Regional variations are evident. While Cardiff and the South Wales Valleys continue to see modest activity, rural areas such as Powys and Ceredigion reported sharper declines in both enquiries and sales.
Despite the downturn, some market participants note that the quality of offers remains robust, with buyers still willing to pay close to asking prices in sought‑after locations.
Surveyors also highlighted a modest increase in the number of properties withdrawn from the market, suggesting sellers are becoming more selective amid the uncertain climate.
Overall, the RICS data paints a picture of a market adjusting to a new normal of higher financing costs, with both demand and supply restrained.
Industry observers caution that the current trajectory could persist if inflationary pressures keep interest rates elevated.
For now, the Welsh housing market appears poised for a period of measured activity, as households balance the desire for homeownership against the reality of tighter credit conditions.