The latest RICS Residential Survey has indicated that there are signs of a slightly more stable outlook emerging in 2023 for the housing market, though it remains downbeat. The newly agreed sales indicator has improved to a net balance of -26% from a net balance of -36%, which is an improvement from last month. Additionally, the number of fresh listings has improved to -4%, compared with -12% in January and -22% in December. Although the headline price balance series remains negative, most respondents suggest that prices are being agreed on average within 5% of the ask price. In the lettings market, there has been an increase in tenant demand while landlord instructions have declined. The survey also indicates that the housing market will continue to slip over the coming three months, as demonstrated by the near-term sales expectations net balance coming in at -47%. However, at the 12-month time horizon, the sales outlook looks to be more stable, with a net balance of -8%.

Sarah Coles, head of personal finance at Hargreaves Lansdown, warns that while the agents in the RICS report are finding reasons for optimism, this may be premature, since buyer and seller numbers continue to drop, agreed sales fell, and prices are still declining. Higher mortgage rates could also mean more forced buyers as time goes on, and for remortgagers, rates are way ahead of their levels back when they last fixed. As a result, the HL Savings & Resilience Barometer shows that remortgaging will eat up an extra 3.1% of their income, which means 2 million people will be spending so much of their income on the mortgage that they're at risk of falling into arrears. For renters, however, there's no let-up, with the number of landlords leaving the market slowing but still packing up and heading out, while tenant numbers continue to grow. It means more rent rises are on the horizon.

Tomer Aboody, director of property lender MT Finance, is more optimistic and sees signs of positivity, with a slowdown in the decline. As Swap rates stabilise, leading to lower fixed-rate mortgages, buyers are slowly returning and looking to secure their home, now that they regard mortgages as more affordable. With hopes of inflation being reduced this year as the Prime Minister pushes for a more stable and improved economy, confidence is creeping back into the market.

According to Jeremy Leaf, a north London estate agent and a former RICS residential chairman, these historically-accurate RICS figures confirm that the housing market continued to slow and become more price-sensitive in February but showed few signs of a correction. Worries about the cost of living and availability of mortgages mean homes are taking longer to sell and keeping prices in check. However, recent falls in lending rates, inflation and increasing property choice is contributing to a readjustment in the previously severe imbalance between supply and demand.