The number of landlords looking to buy property in September dropped sharply, indicating a degree of caution ahead of the Autumn Budget.
The RICS UK Residential Market Survey revealed there was a net -38% of landlord instructions to conveyancers, an indicator of buyer sentiment.
RICS predicted rental growth of 3% over the next year, in part due to the lack of landlord buyer interest.
Agreed sales across the market fell for a third consecutive month in September, by a net -16%.
Tarrant Parsons, head of market research and analytics at RICS, said: “The housing market continues to struggle for momentum, with seemingly no clear catalyst on the horizon to spark a turnaround over the near-term.
“Buyer demand remains subdued, while agreed sales are still on a downward trend, reflecting a broader hesitancy in the market.
“Ongoing uncertainty around potential measures in the upcoming Budget is also likely adding to the prevailing cautious sentiment.”
The Autumn Budget will take place on 26 November.
For buyers the current situation represents a potential opportunity to buy at a discount, as a net -15% saw house price decline across the South East and East
Anglia, while much of the rest of the UK indicated more modest declines.
Scotland and Northern Ireland were outliers, where RICS agents experienced minor price rises.
Jeremy Leaf north London estate agent and a former RICS residential chairman, said: “The imminent arrival of the Renters’ Rights Bill and other regulations, which are likely to add to costs and difficulty of regaining possession, has given further impetus to landlords minded to sell.
“Conversely, the amount of choice for buyers – often of smaller flats and houses – as well as weaker demand has made it more of a struggle than many anticipated so some are returning to lettings.
“Demand remains steady so there’s a strong possibility that rents will resume a more rapid upward trajectory sooner rather than later.”
Tom Bill, head of UK residential research at Knight Frank, said: “Activity in the UK housing market has been building since April, a month when confidence was dented by higher rates of stamp duty and tariff-related turmoil on financial markets.
“Demand has been supported by stable mortgage rates and downwards pressure on asking prices due to high levels of supply.
“However, there is a creeping mood of hesitation as November’s Budget moves onto the radar and a game of ‘guess the tax rise’ takes place for the second successive year.”