Higher mortgage rates over the summer have pushed up the cost of buying, contributing to a 9% fall in the number of sales being agreed versus last year, the latest figures from Zoopla show.
Annual house price growth has also slowed to 0.8%, the lowest level for over two years since July 2024, down from 1.7% a year ago and 0.9% last month.
With average mortgage rates now at 5.2%, their highest level for three years and up from 4% at the start of the year, the average homebuyer now faces an extra £150 per month (£1,800 a year) in mortgage repayments. Higher buying costs are weighing on demand with sales agreed falling across every region and country of the UK.
A quarter of newly listed homes listed for sale this month have been previously listed for sale in the last year, with six in ten returning at a lower asking price.
These homes are returning to a market where buyers have more choice. The number of homes for sale is 5% higher than a year ago, while sales agreed over the past four weeks are 9% lower.
This imbalance is clear across much of the country, particularly London and southern England, where the number of homes for sale is 8% higher than last year. Sales agreed have fallen most sharply in the West Midlands, down 15% year-on-year, and the East of England down 14%. Scotland remains relatively resilient, seeing a smaller decline of 1%, whilst the number of homes for sale is up 3%.
House price growth continues to vary
The picture varies between flats and houses. Flat prices have been falling for 15 months, since May 2025. House prices have continued to rise, with annual growth of around 2-2.5% over the last year, although this has slowed in recent months as a result of higher mortgage rates and fewer sales.
The variation in house price growth between flats and houses is very different across Britain. House prices are rising fastest in Northern Ireland followed by the North West, up 3.6% year-on-year, followed by Scotland at 3% and the North East at 2.4%. Growth in house values has stalled across much of southern England where property values are higher and more sensitive to higher borrowing costs. Flat prices are falling in almost every region, with Scotland and the North East the notable exceptions.
Regional price trends are reflected in how quickly homes find buyers. Around three-quarters of homes listed in Scotland find a buyer within three months, compared with approximately half in northern England and just three in ten in London.
These differences extend to property types. More affordable two and three-bedroom houses generally attract stronger demand, while flats and larger family homes face more challenging conditions in many areas, particularly southern England.
Richard Donnell, executive director at Zoopla, commented: “The Middle East conflict has pushed up energy prices and mortgage rates, tempering the autumn rebound in housing activity.
"Borrowing costs are likely to remain elevated, with house price inflation drifting towards 0.5% by year-end and annual sales expected to be closer to 1.1 million versus 1.2 last year.
“While key measures of housing market activity are lower than last year, there is still plenty of demand for homes. Buyers are simply more cautious and selective about what they view and offer.”
