Britain’s housing market experienced its weakest month in over a year in February, as the momentum from a surge in buyers rushing to complete deals before a tax break deadline began to

fade, according to a survey released on Thursday.

The Royal Institution of Chartered Surveyors (RICS) reported that buyer demand had fallen to its lowest level since November 2023, with expectations of further cooling in the months ahead.

The survey’s net balance of house prices—reflecting the difference between surveyors reporting price increases and decreases—dropped to +11, the lowest since September last year. This marked a sharp decline from +21 in January and a two-year high of +25 in December. The figure also fell short of all economist forecasts in a Reuters poll, which had predicted only a slight slowdown.

In recent months, Britain’s housing market had gained momentum, driven by expectations of Bank of England interest rate cuts and a rush by buyers to take advantage of tax relief set to expire on March 31 for lower-priced homes and first-time buyers. However, with the deadline approaching, the surge in activity appears to have cooled.

RICS Chief Economist Simon Rubinsohn attributed the slowdown to the impending expiry of the tax breaks and concerns over inflation pressures, exacerbated by global uncertainty.

"That said, looking beyond the next few months, sales activity is expected to pick up again, with prices also likely to rise," Rubinsohn noted.

In the rental market, tenant demand continued to shrink for the fourth consecutive month—the longest such decline since records began in 2012. However, a net balance of +34% of survey participants anticipated rental prices to increase over the next three months, as the supply of available properties diminishes faster than demand.

Meanwhile, Prime Minister Keir Starmer has pledged to accelerate house-building efforts to address the country’s ongoing housing shortage.