The UK housing market is maintaining steady sales activity despite rising uncertainty over events in the Middle East, Zoopla’s latest House Price Index shows. Higher mortgage rates linked to these tensions are affecting buyer demand.

While transactions continue, the market is increasingly reliant on a smaller group of committed buyers, as some households delay moving. This is widening the gap between weaker overall demand and relatively stable levels of agreed sales.

Table 1:  Divergence between sales agreed and home buyer enquiries

Zoopla’s data shows that buyer demand has been below last year’s levels during the first three months of 2026. In March, enquiries were 13% lower than a year earlier, reflecting the impact of events in the Middle East and a more cautious, “wait and see” approach among potential buyers. Average mortgage rates rose by 0.4 percentage points over the month, and several sub-4% deals were withdrawn as markets and buyers adjusted to uncertainty around inflation.

Despite weaker demand, sales agreed have remained relatively stable, falling just 2% year-on-year. This is driven by buyers with mortgage offers in place or a clear need to move, who continue to support transaction levels.

Fewer buyers, but  more motivated movers supporting sales

This gap between buyer demand and more stable sales agreed is reflected across the country. Buyer enquiries have decreased by between 7% and 19% year-on-year, with the largest decline in active buyers recorded in the North East and West Midlands, albeit with enquiries falling off a high base compared to last year.

Table 2: The gap between sales agreed and buyer enquiries is seen across the country

Meanwhile, sales agreed are holding up more consistently, with more modest declines in northern regions of England, again off a high base. Unlike buyer demand, sales agreed are flat or slightly higher in some regions -such as Wales, Yorkshire and the Humber and London compared to last year.

At the same time, the overall number of homes for sale has increased by 6% year on year, reflecting a continued desire among homeowners to move despite the more uncertain backdrop.

A significant proportion of transactions are also less sensitive to rising mortgage rates. Around a quarter of sales are cash purchases, while many existing homeowners have built up equity and secured borrowing in advance, reducing the impact of higher mortgage rates. This is helping to support sales in the short term, but also highlights growing reliance on less mortgage-rate sensitive buyers.

House price growth remains stable

Overall, UK house price inflation is holding steady at +1.3% year on year, with little immediate impact from the recent weakening in buyer demand. Price trends remain uneven across the country. Growth is strongest in more affordable areas, with the North West recording annual growth of 3.5%, though price falls across southern England have moderated in recent months despite a softening in demand.

Zoopla does not expect house price growth to slow in the near term, although this depends on demand remaining stable in the coming months. A pricing impact would require a more sustained decline in buyer activity and sales volumes meaning current growth rates are set to continue.

Table 3:  House price inflation %yoy – February 2026

Richard Donnell, executive director at Zoopla, said: “The market remains active, but becoming increasingly reliant on a smaller pool of serious buyers. Some early stage buyers are adopting a wait and see approach but there is a sizable group of committed buyers who are pressing ahead with housing purchases.

“If mortgage rates stabilise at current levels we expect sales activity to continue to hold up well compared to last year. Further increases in borrowing costs could weaken demand and impact sales volumes later in the year. The outlook is far from clear although we can see demand has stabilised over recent days.

“For buyers, there is less competition and more choice, but affordability is becoming more stretched. For sellers, homes are still selling, but buyers are more selective and price-sensitive. Setting a realistic asking price with the help of a local agent will be critical to securing a sale.”