Buyers return as housing market gathers momentum

Buyer activity has started to recover following the summer slowdown, despite higher mortgage rates reducing household borrowing power by 9% since the start of the year, according to the latest Zoopla House Price Index.

The property portal reports that the number of people searching for homes has increased by 7% compared with a year ago, the strongest annual rise since mortgage rates increased in the spring.

Sales agreed remain 6% below last year’s level, although Zoopla said the gap has started to narrow as buyers return to the market following several quieter months.

Average five-year fixed mortgage rates have increased from below 4% in January to around 4.8%. Zoopla estimates that a buyer previously able to borrow £200,000 for a given monthly repayment could now borrow approximately £182,000 on the same repayment – a reduction of 9%.

To maintain the same borrowing level without increasing monthly repayments, the average buyer would need to contribute an additional £18,200 towards their deposit.

The figure varies considerably by region because of differences in property values. Buyers in London would need to find an additional £35,500, compared with £10,200 in the North East.

Zoopla said the effect of higher mortgage rates is particularly significant for first-time buyers, who typically borrow a greater proportion of a property’s value and often take mortgages over longer terms.

Searches increase across every region

Despite the affordability squeeze, buyer search activity has increased across every UK region and country for the first time since August 2025.

The strongest annual increases have been recorded in the South East, up 8.9%, and the East of England, up 8.5%. The North West recorded the smallest increase, at 0.7%.

The rise in searches is an early indicator of demand rather than completed transactions, with any improvement expected to take time to translate into enquiries and agreed sales.

Sellers are also returning to the market, with the number of newly listed properties close to last year’s level. Overall stock is 5% higher than a year ago, providing buyers with greater choice and limiting sellers’ ability to increase asking prices.

Late August and early September typically bring an increase in price reductions as vendors reposition properties ahead of the autumn market.

House price growth slows to 0.9%

UK house price growth slowed to 0.9% year-on-year in July, down from 1.3% a month earlier, as weaker transaction levels and affordability pressures weighed on values.

Prices are flat or falling across much of southern England, with annual declines ranging from 0.3% in the South East to 1% in London.

Growth remains stronger across much of the North and Midlands. Prices are up 1.7% in Yorkshire and 3.1% in the North West, while Northern Ireland recorded the strongest annual increase at 5.4%.

Average house prices and annual change per area

Richard Donnell, executive director at Zoopla, said: “Many buyers have taken a ‘wait and see’ approach over the summer months in response to higher borrowing costs and political uncertainty. The low point for activity was mid July around the time of the World Cup final.  Since then we have seen a steady increase in the number of people searching for a home, assessing their options ahead of the post holiday rebound in sales market activity. This is a nationwide trend and the first time searches for homes are up across Britain this year.

“Average mortgage rates have stabilised but remain closer to 5% than 4% meaning affordability remains an important factor for many home buyers choosing their next home.  Buyers have plenty of choice this autumn and will be able to make competitive bids for homes. Motivated sellers need to price carefully to attract interest and bids and seek the advice of local agents for the likely levels of demand and interest in their home as market conditions vary widely across the country.”

Related Article Property industry reacts to Zoopla House Price Index