Richard Donnell

Three in five homes listed for sale since January remain unsold, as higher mortgage rates and political uncertainty continue to weigh on buyer confidence, according to Zoopla’s latest House Price Index.

The portal reports that sales agreed over the past four weeks are down 7% compared with a year ago, while buyer demand has fallen by 15% as many prospective purchasers delay moving until market conditions become clearer.

Zoopla says the rise in mortgage rates to around 5% in April has had a significant impact on affordability, although the effect varies widely across the UK. The average monthly mortgage payment has increased by around £125 nationally, rising by £232 for a typical first-time buyer in London compared with £66 in the North East.

The slowdown has been most pronounced in Wales, where sales agreed are down 12% year-on-year, followed by the East Midlands (11%), the East of England (10%) and the South West (10%). London has recorded a 9% fall in agreed sales, while the West Midlands has seen the steepest decline in buyer demand, down 30% on last year.

Flats continue to be the weakest-performing part of the market, with more than two-thirds of one and two-bedroom apartments listed this year still awaiting a buyer. Zoopla says higher borrowing costs and stamp duty have disproportionately affected first-time buyers, particularly in London, where purchasing costs are significantly higher than in many northern regions.

The softer market is also feeding through into house prices. Annual UK house price growth has slowed to 1.4%, with the strongest performance in the North East and North West, where prices are up 3.5%, and Scotland, where values have risen by 3%. In contrast, London has recorded its ninth consecutive month of annual price falls at -0.2%, while prices in the South East are down 0.3%.

Zoopla said asking price realism will be increasingly important for sellers as the market adjusts to weaker demand and higher borrowing costs.

Richard Donnell, executive director at Zoopla, said: “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.

“For sellers still waiting for an offer, the conversation to have is about price. Correctly priced homes are selling, while overpriced homes are sitting. For buyers, rates are falling, there is more choice of homes for sale than a year ago and motivated sellers are willing to negotiate. If you are ready to move, conditions are more favourable than they were three months ago.”