The RICS March 2026 residential market survey tells two very different stories. In lettings, tenant demand is rising and rents are heading higher. In sales, buyer confidence has collapsed to its weakest level since August 2023. The gap between those two markets is the opportunity.
The Lettings Picture
Tenant demand rose to a net balance of +10% in March, according to the RICS UK Residential Market Survey (Letting Agent Today, 9 April 2026). Landlord instructions stayed negative at -25% - meaning the supply-demand imbalance that has driven rents higher over the past two years is not going away.
Near-term rental expectations jumped to +29%. That is a strong reading. Survey respondents expect continued upward pressure on rents, driven by limited stock as landlords exit ahead of the Renters' Rights Act and conversion to short-term lets reduces available long-term supply.
That last point matters. The landlord sell-off is not new, but it is ongoing. Every portfolio landlord who exits the private rented sector (PRS) reduces supply. For those who stay in, yields improve as a result.
The Sales Collapse
The sales figures are stark. New buyer enquiries fell to a net balance of -39% in March, down from -29% in February. That is the weakest reading since August 2023 (Letting Agent Today, 9 April 2026).
Agreed sales dropped to -34%, from -13% the previous month. Short-term sales expectations fell to -33%. The 12-month outlook sits at just -1%, pointing to a broadly flat market.
On prices, the headline balance fell to -23% in March - down from -14% and -10% in the prior two months. Three-month price expectations hit -43%. London, East Anglia, the South East and the South West all posted weaker readings than the national average. Scotland and Northern Ireland bucked the trend with rising prices.
Tarrant Parsons, RICS Head of Market Research and Analysis, pointed to the Middle East conflict and rising mortgage costs as the driver: "The renewed deterioration in the mortgage rate outlook has proved particularly challenging. With average fixed rates climbing back above 5% according to some sources, it is unsurprising that buyer demand has softened." He added that the path forward depends on whether oil and energy costs reverse in what remains a highly uncertain geopolitical environment.
Where the Opportunity Is
When sales markets soften and lettings hold firm, the arbitrage for investors is clear. Vendors in the weaker regions - particularly the South East and East Anglia - are under more pressure than the national average. That creates more room to negotiate on price. The lettings yield on properties bought at a discount in a buyer's market looks considerably better than the same yield bought at peak pricing.
Watch the unsold stock number too. Estate agents reported an average of 47 properties on their books in March, up from around 45 at the start of the year. That is modest, but the direction of travel is more stock, less competition per property - the margin on a well-sourced buy-to-let (BTL) acquisition is improving.
