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According to the property website Zoopla, 60% of homes put up for sale since January are still available on the market, as buyers face challenges due to elevated mortgage rates. The combination of lower buyer interest and some sellers setting high asking prices has resulted in many properties remaining unsold in several regions.
Zoopla’s analysis revealed that the number of agreed sales is 7% lower than the previous year, though regional differences are evident. For example, sales declined by 12% in Wales and by 11% in the East Midlands. First-time buyers have been particularly affected by rising mortgage costs, but recent trends show increasing competition among lenders, which has led to some reduction in rates. Notably, mortgage rates surged in April after financial turmoil linked to the conflict involving the US, Israel, and Iran, causing the average monthly mortgage payment to rise by £125 compared to January.
In London, the peak increase for first-time buyers was even more significant, with an additional £232 added to their monthly mortgage expenses. Data from Moneyfacts shows the typical two-year fixed mortgage rate escalated from 4.83% in early March to a high of 5.90% on April 12 but has since eased to 5.54%. This spike played a key role in a 15% year-on-year drop in UK buyer demand by the end of May, as reported by Zoopla. However, in the northeast of England, first-time buyers only faced a smaller increase of around £66 per month in mortgage costs during the same timeframe.
Richard Donnell, executive director at Zoopla, emphasized the importance of local market conditions, stating that, “The national picture can only tell you so much.” He advised sellers still waiting for offers to reconsider their asking prices, noting that “Correctly priced homes are selling, while overpriced homes are sitting.” Donnell also highlighted recent reductions in mortgage rates as a positive development for buyers and said, “If you are ready to move, conditions are more favourable than they were three months ago.”
The Bank of England also reported that mortgage approvals for home purchases reached their lowest point in two and a half years during May, influenced by higher rates and withdrawn sales. Zoopla pointed out that this decline in demand among first-time buyers has led to a significant number of unsold one and two-bedroom flats, which make up two-thirds of such listings this year. In contrast, the sales rate of two and three-bedroom houses has remained steadier. Additionally, regions such as northern England and Scotland have seen smaller drops in sales and experience less pronounced rises in mortgage costs, partly due to fewer homes on the market.
Estate agents have noted that homes available surpass buyer interest across various price brackets. Market uncertainty has been fueled by financial disruptions linked to the Iran conflict and shifts in UK political leadership. Jeremy Leaf, a north London estate agent, observed, “Sales are taking much longer and it is proving increasingly difficult to generate commitment.” He added that while most agreed sales are moving forward, the process is naturally slower than usual
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