Agreed home sales have fallen over the summer

Higher mortgage rates over the summer have pushed up the cost of home buying, contributing to a nine per cent fall in the number of sales being agreed versus last year.

In the East of England, sales agreed are among those that have fallen most sharply, down 14 per cent year on year.

Annual house price growth has also slowed to 0.8 per cent, the lowest level for over two years since July 2024, according to the latest Zoopla House Price Index.

With average mortgage rates at 5.2 per cent, their highest level for three years and up from four per cent 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.

Six in 10 are returning at a lower asking price, which helps improve saleability if the cuts align to what buyers are prepared to pay, while the rest have been listed at their previous price.

These relistings are most common among flats and larger houses, which are generally taking longer to find buyers.

In London, a third of flats coming onto the market have been listed before, compared with fewer than one in ten in Scotland.

These homes are returning to a market where buyers have more choice. The number of homes for sale is five per cent higher than a year ago, while sales agreed over the past four weeks are nine per cent lower.

This imbalance is clear across much of the country, particularly London and southern England, where the number of homes for sale is eight per cent higher than last year.

Sales agreed have fallen most sharply in the West Midlands, down 15 per cent year on year and the East of England, down 14 per cent.

Scotland remains relatively resilient, seeing a smaller decline of one per cent, while the number of homes for sale is up three per cent.

The average price of a UK home is currently £273,000.

House price growth has slowed to 0.8 per cent across all types of property, down from 1.7 per cent a year ago and 0.9 per cent last month.

Richard Donnell, Executive Director at Zoopla, says: “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 per cent by year-end and annual sales expected to be closer to 1.1 million versus 1.2 million 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.

“Sellers who factor in local market conditions and seek detailed advice from their local estate agents on how to set the asking price can still find a buyer relatively quickly.

“Getting the right price from the outset is essential.”