More than a third (35%) of UK homes are in postcode areas where house prices are falling, up from 12% a year ago, according to the latest House Price Index from Zoopla.
Higher mortgage rates have increased the cost of buying and made buyers more selective. The number of sales agreed over the last four weeks is 7% lower than a year ago across the UK.
At the same time, the number of homes for sale is 7% higher than last year, giving buyers more choice and greater room to negotiate. This, in turn, is also putting greater pressure on sellers to price their properties competitively to attract buyer interest.
One third of homes in markets registering house price falls
The average UK house price now stands at £273,100, which is 0.8% higher than last year, although the national figure masks significant regional and local differences.
The greatest pressure on house prices is in southern England where higher mortgage rates are adding the most to buyers’ monthly mortgage payments. Average home values are falling by 1% in London with the average home now £5,400 lower than a year ago. In contrast, the average home in the North West is worth £6,600 more than a year ago, an increase of 3.2%.
At a more localised level, 85% of homes in London and the South East are in postcode areas with price falls. Three quarters of homes in the Eastern region and 42% in the South West are also located in postcode areas registering price falls. The largest price falls are concentrated across North West London (-2.2%) and WC London (-5.7%) but also along the south coast including Bournemouth (-1.7%), Truro (-2.2%) and Torquay (-1.7%).
House prices are rising across the rest of the country where homes are more affordable and the impact of higher mortgage rates is less pronounced. There are still areas of the country where home values are rising by more than 3%, particularly across the North West and Scotland. House prices are rising by more than 4% in Liverpool, Carlisle and Kilmarnock postcode areas.
Buyers are still active but sellers pricing too high are being left behind
Despite buyers becoming more cautious, homes that find a buyer are selling just as quickly as a year ago, taking an average of 44 days nationally, with faster sales in more affordable areas.
However, with buyers having more choice, getting the asking price right from the outset is increasingly important. Zoopla analysis of homes listed for sale between April and June 2026 shows that 41% of homes listed 5% or more below their estimated value found a buyer within 90 days, compared with just 26% of those priced at least 20% above their estimated value.
Reducing the asking price later is no guarantee of finding a buyer. Just 19% of homes that underwent a price reduction sold within 90 days, compared with 41% of those without a reduction.
Richard Donnell, executive director at Zoopla, commented: “The extra cost of mortgages has made home buyers more selective while greater choice of homes for sale has increased the scope to negotiate on price. The impact is being felt by sellers in southern England where house price falls are most concentrated as average prices continue to rise across the rest of the country.
“There is still demand to buy homes, and those that are well priced and presented are selling just as quickly as last year. Getting the price right from the start is essential. Overpricing significantly reduces the chances of selling, so sellers should seek advice from local agents on buyer demand and the right asking price for their home.”
