The UK housing market downturn eases but sentiment remains 'fragile', surveyors say. Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy. The UK housing market remains subdued but the downturn eased last month, while sentiment remains 'fragile', according to surveyors and estate agents. They expressed ongoing concerns about the impact of inflation, the cost of living, UK political uncertainty and global conflicts, with some sharing hopes that the recent ceasefire in the Iran war will boost market conditions. The survey's headline house price balance was little changed at -33%, from a revised -34% in May, while price expectations rose to +8% from +6% according to a monthly survey from the Royal Institution of Chartered Surveyors (RICS). The balance subtracts those who say demand fell from those who report it rose. New buyer enquiries remained negative, with a headline net balance of -29%, but this was a slight improvement on the -34% recorded in the previous two months and marks the least negative reading since February. Newly agreed sales also remained subdued, with a net balance of -32%, but a small improvement from -35% previously. Near-term sales expectations improved to -16%, from a recent low of -34% in March. Looking further ahead, respondents expect sales volumes to remain broadly flat over the next twelve months, with a net balance of +1%. However, new instructions to put properties on the sales market moved further into negative territory, dropping to -23% from -10%, the weakest reading in more than a year. Market appraisals also declined, suggesting the pipeline of homes coming to market may remain limited in the months ahead. RICS head of market and analysis Tarrant Parsons said: 'June’s survey results offer some cautious encouragement that the worst of the slowdown in market activity may be beginning to pass, with several key indicators moving in a less negative direction for a second consecutive month. That said, any nascent improvement remains fragile and is now being tested by renewed political uncertainty on the domestic front. While the Bank of England left interest rates unchanged, uncertainty around the outlook for inflation and borrowing costs continues to weigh on sentiment, even if the recent decline in oil prices is a welcome development. Until there is greater clarity over both the political backdrop and the path of interest rates, housing market activity is likely to remain relatively subdued in the near term. In the lettings market, tenant demand picked up, with the headline net balance rising to +18%, the strongest reading since May 2025. Landlord instructions remained negative at -18%, pointing to continued supply constraints. Against this backdrop, rents are expected to continue rising, with projected rental growth over the next twelve months standing at around 2.5%. The north of England continues to express more positive sentiment than the south generally. Dan Stocks, a surveyor in Guildford, said: 'Market uncertainty remains due to Labour leadership changes, cost-of-living pressures, fuel prices, the ongoing Russia-Ukraine war and the recent conflict involving Iran, all of which continue to weaken confidence.' After Wednesday’s jump in oil prices, where Brent crude briefly went above $80 a barrel, crude is little changed on Thursday. Brent dipped 0.3% to $77.78 a barrel. Asian stock markets mostly bounced back following Wednesday’s losses. Japan’s Nikkei rose 1.4% and China’s CSI 300 advanced 1.9% while South Korea’s Kospi gained 1%. China’s producer price inflation has risen to the highest in four years, piling pressure on manufacturers as weak domestic demand restrains their ability to raise prices. China’s economy is showing a two-track dynamic as a global AI boom lifts advanced manufacturing while weak household spending and the property downturn weigh on domestic activity. The producer price index rose 4.1% year on year to the highest since July 2022, according to the National Bureau of Statistics. This is up from a 3.9% gain in May and reflects the impact of soaring energy prices because of the Iran war. The Agenda 12.30pm BST: ECB account of June meeting 1.30pm BST: US Initial jobless claims for week to 4 July 3pm BST: US Existing home sales for June
