Three in five homes listed for sale since January are yet to find a buyer, Zoopla’s latest house price index reveals, as sales agreed fall by 7% year-on-year.
Declines are more modest in Northern regions and Scotland where buyers face fewer home options for sale with the North West and Scotland both recording a -4% decline in sales stock.
However, Wales (-12%), East Midlands (-11%), East of England (-10%) and South West (-10%), have seen the largest decreases in sales agreed, while London (-9%) and the West Midlands (-8%) also sit above average.
The West Midlands has seen the steepest decrease in buyer demand, with this dropping by -30% YoY, closely followed by the North East at -29%.
The index also reveals that buyer demand has fallen by 15% year-on-year across the UK, with the combination of political uncertainty and higher borrowing costs hitting buyers differently across the country.
Zoopla’s data also shows that two and three-bedroom houses are selling at a pace similar to last year’s across the country, with committed movers still transacting.
One- and two-bedroom flats remain the weakest market segment, as over two-thirds listed this year remain unsold.
With mortgage rates hitting 5% in April, would-be buyers are facing an extra £125 monthly on top of the average mortgage, adding up to £1,500 a year.
However, the same rate rises are hitting buyers very differently depending on where they are buying.
First-time buyers have also been hit with those in London seeing a monthly increase of £232, which is nearly three and a half times the £66 monthly increase facing a first-time buyer in the North East.
But Zoopla highlights that it’s positive that mortgage rates have already started to fall, edging lower in May to 4.8%.
The decline in borrowing costs needs to go further to improve affordability and support housing sales in the second half of 2026.
Meanwhile, fewer sales is starting to feed into UK house price inflation, which has edged lower to 1.4% YoY.
The latest data for price inflation reflects sales agreed earlier in the year, before the full impact of higher rates was felt, meaning price inflation is set to slow further into the autumn unless mortgage rates fall further and sales recover.
The North East and North West are currently the strongest performing regions in England, seeing growth of 3.5%, while those in Scotland, where there remains a scarcity of supply with fewer homes for sale than last year, are registering growth of 3%.
However, London is facing its ninth consecutive month of negative annual house price growth, with this sitting at -0.2% in May.
The South East is similarly low at -0.3%, making getting the asking price right is essential and the difference between moving and not moving this year for sellers in the South.
Commenting on the latest trends and what this means for home buyers and sellers, Zoopla executive director Richard Donnell says: “Higher mortgage rates have hit sales and squeezed affordability for home buyers alongside increased political uncertainty. The impact is less severe than what the market faced after the 2022 mini-budget, and mortgage rates have started to fall.”
“It’s a buyer’s market across much of the South right now, but motivated sellers in northern England and Scotland are still finding buyers at broadly last year’s pace which shows the housing market is not moving at one speed.”
“The national picture can only tell you so much, and local market conditions vary considerably across the country. The most important step, whether you are buying or selling, is speaking to a local agent who knows what is actually happening on your street.”
Elsewhere, Propertymark chief executive Nathan Emerson states: “Economic and political uncertainty will always influence confidence, but people continue to move because of changing jobs, growing families, retirement and other life events that cannot simply be put on hold indefinitely.”
“Property professionals are continuing to see healthy levels of enquiries and viewings, but many buyers are taking longer to commit and are carrying out more research before making an offer. Confidence has softened rather than disappeared, making realistic pricing and expert local advice more important than ever.”
“Today’s figures also reinforce that there is no single national housing market. Conditions vary considerably from one area to another, and local agents play a vital role in helping buyers and sellers navigate changing market conditions and keep transactions progressing.”
Former RICS residential chairman Jeremy Leaf adds: “A combination of too much property on the market across various price ranges, as well as continuing uncertainty about the protracted war in Iran and the subsequent impact on the economy, is proving lethal as far as homebuyer and seller confidence is concerned.”
“Sales are taking much longer and it is proving increasingly difficult to generate commitment. However, the overwhelming majority of sales which have been agreed are proceeding, although inevitably more slowly and suffering relatively few price negotiations.”
“This is likely to prove the ‘new normal’ at best, looking forward, particularly now that domestic political uncertainty is another factor to consider.”
