However, overall activity is remaining stable for now, the housing group said.

Connells’ figures found that 83% of home movers agreed mortgage rates above 4% in March, up from 58% in February.

This is the highest month-on-month rise since the market turmoil following the 2022 Liz Truss mini-Budget.

The average mortgage rate rose to 4.57%, Connells said, the highest level since April 2025.

But buyer activity has proved fairly resilient, with sales across Great Britain down only 2% in March.

Connells Group research director Aneisha Beveridge said: “What unsettled the market in March wasn’t so much the level of mortgage rates, which are broadly back to where they were this time last year, but the rapid change in direction and pace at which borrowing costs rose.

“Even so, the market has held up better than many feared. Buyer demand cooled modestly, but it didn’t fall away.”

First-time buyers made up 34% of all sales in March, the highest proportion recorded for the month since 2006.

This group saw the lowest increase in mortgage rates of any buyer type, Connells said. Home movers saw the highest rise in borrowing costs, especially those moving into more expensive homes.

Scotland and London saw yearly increases in demand, with parts of the North and Midlands seeing more significant declines as affordability pressures rose.

The South East was the region with the largest fall in sales agreed, down 12% year-on-year.

The number of new properties coming to market dropped by 7% year-on-year in March, the most pronounced fall in almost a year, Connells said.

Only 16.8% of homes sold in England and Wales were sold for below their final asking price in March, Connells said, the lowest proportion since September 2025.

Beveridge said: “As the boost from cheaper mortgage deals secured earlier in the year fades, activity may soften further in the near term while households adjust.

“However, financial markets have since stabilised. With fewer rate rises now expected, it should allow mortgage rates to ease back, albeit not to their level earlier in the year.

“If that pressure lifts, confidence is likely to rebuild, supporting a firmer footing for the market as we move through the year.”