RICS Buyer Enquiries Fall to December Lows as the Iran War Delays Rate Cuts — A Reckoning for London and South East Property

The Royal Institution of Chartered Surveyors released its February 2026 UK Residential Market Survey on 12 March, providing the first systematic read of professional estate agent sentiment following the outbreak of the US-Israeli military campaign against Iran on 28 February. The survey covered responses gathered between 23 February and 9 March — a period that straddled the start of hostilities — and the data reflects a market that was tentatively improving at the start of the year and has since stalled. New buyer enquiries fell to a net balance of -26, the weakest reading since December, down from -15 in January. RICS head of market research Tarrant Parsons described it as a moment of 'renewed volatility,' noting that while activity indicators had suggested tentative improvement earlier in the year, 'the deterioration in the geopolitical backdrop has clearly weighed on confidence.'

The Numbers: A Market Losing Momentum

The headline RICS figures show deterioration across every short-term indicator. The house price net balance — the proportion of surveyors reporting price rises minus those reporting falls — came in at -12% in February, worse than both the -10% recorded in January and the consensus forecast of -9%. Near-term expectations deteriorated sharply: the index tracking expected house prices over the next three months collapsed to -18 from -6, and near-term sales expectations registered -2%, the softest reading since November. Only the 12-month horizon held firm, with a national net balance of +17% of respondents expecting sales activity to improve over the year — though even that figure conceals a striking collapse in London's longer-term confidence, which fell from +56% to +7%. The survey covered 635 branches and drew 287 responses.

• RICS house price net balance: -12% in February, worsened from -10% in January; consensus forecast was -9%
• New buyer enquiries: net -26, the lowest reading since December, down from -15 in January
• Agreed sales net balance: -12%, from -9% in January
• Near-term house price expectations: -18, collapsed from -6 previously
• Near-term sales expectations: -2%, softest since November, from +4% in January
• 12-month sales outlook: +17% nationally; London cooled sharply from +56% to +7%
• Halifax UK average house price: £301,151, up 0.3% month-on-month and 1.3% year-on-year

Where the Pressure Is Most Acute — London and the South East

The geographic divergence in the RICS data is where this survey becomes most material for readers with concentrated prime UK residential holdings. London is recording the most severe downward price pressure of any region, with a net balance of -40%, followed by East Anglia at -26% and the South East at -24%. These three regions account for the majority of prime residential wealth in the United Kingdom. Halifax data corroborates the picture: London average values have fallen 1.0% year-on-year to £538,200, while South East prices are down 2.2% annually to £383,834 — underperforming the national average in both price level and momentum. By contrast, Northern Ireland, Scotland, and the North West continue to report broadly stable or improving conditions. The divergence reflects both affordability differentials and the geographic concentration of mortgage-sensitive buyers in southern markets — the precise segment most exposed to any sustained repricing of rate expectations.

Why This Is Happening — Energy, Inflation, and Delayed Rate Relief

The causal chain is straightforward. Brent crude jumped as much as 13% on news of the strikes against Iran, reaching approximately $82 a barrel, as markets priced in supply disruption risk through the Strait of Hormuz. Higher energy prices translate directly into CPI inflation remaining above target for longer. UK headline CPI had been widely expected to return to the 2% target by April; those projections are now under active revision. Alice Haine of BestInvest by Evelyn Partners noted that the conflict 'has sent energy prices soaring, creating an inflationary headwind which may cloud the outlook for interest rates.' The Bank of England's Monetary Policy Committee was scheduled to meet on 19 March — a meeting at which a rate cut had been treated as near-certain before the strikes. Capital Economics issued a warning that goes beyond mere delay: the possibility of rate hikes, rather than cuts, 'risks derailing the strengthening in the housing market we forecast this year.' For prime London and South East buyers and sellers exposed to variable-rate financing, this repricing is material.

What This Means for UK-Based HNW Individuals Weighing Relocation

For high-net-worth individuals domiciled in the UK who have been considering a phased relocation to the UAE, this survey adds a layer of complexity to an already nuanced calculus. The structural case for reducing UK residential exposure has been building for the past 18 months: Labour's reforms to non-domicile taxation, the reversion of Stamp Duty thresholds in April 2025, elevated mortgage rates compressing demand from below, and now geopolitically-driven rate uncertainty extending that pressure indefinitely. Jeremy Leaf, former RICS residential chairman, observed that buyers and sellers are 'pressing the pause button' and anticipated that pressure would intensify if rate uncertainty persisted. The risk — from a timing perspective — is that sellers in London and the South East who delay exit in hope of a recovery may find themselves waiting for rate relief that does not arrive on the previously expected schedule. The Dubai side of the equation carries its own short-term complexity: real estate stocks in the emirate fell more than 15% in the week following the strikes, and HNW transaction timelines have lengthened. However, Dubai's structural advantages — zero capital gains tax, USD-pegged currency, and a market dominated by cash buyers rather than leveraged borrowers — remain intact, and the medium-term trajectory for prime Dubai property is supported by structural demand that UK prime residential no longer commands.

Advisory Perspective

We read this survey as confirmation of a structural shift that has been accumulating beneath the surface of UK prime residential for the past two years. The Iran war has not created new vulnerabilities in the London and South East market — it has removed the assumption of rate relief that was masking them. The combination of geopolitically-driven inflation risk, prolonged elevated mortgage rates, and concentrated wealth in exactly the regions most exposed to sentiment-driven softening creates a clear framework for HNW owners to be reviewing, rather than deferring, UK residential allocation decisions. We are working with clients to model phased exit sequencing: identifying the structural threshold at which London prime disposal makes sense against current and projected valuations, while simultaneously completing the UAE residency, banking, and corporate infrastructure that makes relocation viable at their wealth tier. The goal is not to react to this week's RICS release, but to ensure the underlying structural decisions are already in motion before the market forces them. The pause that Jeremy Leaf describes is, for most HNW sellers in prime markets, a cost — not a strategy.