Demand for residential property declined to the lowest since 2023 and agreed sales turned negative and house prices logged a subdued growth in February as the stamp duty deadline approaches, the Royal Institution of Chartered Surveyors, or RICS, said on Thursday.

Buyer demand weakened in February with the balance falling to -14 percent from -1 percent in January. This was the weakest result since November 2023.

The survey respondents cited that the oncoming changes to Stamp Duty starting April 1, where the threshold will reduce to GBP 125,000 from GBP 250,000, is expected to weaken market activity. This is increasingly influencing the slowdown as deadline approaches, RICS said.

Moreover, geopolitical and global economic uncertainties are also less favorable for the housing sector, the agency added. However, house prices continued to increase in February. The net balance of respondents reporting rise in house prices came in at +11 percent, but down from 21 percent in January.

Respondents viewed that there is an appetite for the Bank of England to cut rates further.

In February, the BoE had reduced its benchmark bank rate by a quarter point to 4.50 percent.

Most respondents expect house prices to rise over the coming twelve months in February. The year-ahead price expectations series stood at +47 percent.

"A key support for the market continues to be the increased flow of existing stock becoming available, giving buyers a greater choice of options," RICS Chief Economist Simon Rubinson said.

"However, leading indicators around new build remain subdued for now, highlighting the significance of the Planning and Infrastructure Bill introduced to Parliament this week," Rubinson added.

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