UK housing market sales fall as mortgage
Agreed property sales in the UK have fallen 9% year-on-year as average mortgage rates climb above 5.2%, adding £150 a month to repayments.
Property sales in the UK fell by 9% compared to last year due to higher mortgage rates. Every region and country of the UK recorded a drop in sales agreed over the four weeks to 20 September, with the gap between supply and demand widening.
Mortgage costs climb to three-year peak
Average mortgage rates are now over 5.2%, the highest level for three years. This marks a sharp rise from the 4% average seen at the start of the year. For the average buyer, these higher mortgage rates add £150 per month, or £1,800 a year, to their repayments.
Relisted properties return at lower prices across the UK
A quarter of homes newly listed in September had been on the market within the last year. Six in ten of those relisted homes returned at a lower asking price, with the rest coming back at their previous price. Relistings were most common among flats and larger houses. These properties generally take longer to find buyers.
Regional contrasts emerge in pricing and supply
The number of new homes for sale increased by 5% compared to the same period last year, but the picture varies significantly by region. In London and southern England, the number of homes for sale is 8% higher than last year. In London, a third of flats coming to market have been listed before.
Activity in Scotland was more stable, with agreed sales down just 1%. The number of homes for sale in Scotland rose 3%. There, fewer than one in ten flats coming onto the market had been listed before.
Industry outlook points to subdued growth ahead
Richard Donnell, executive director at Zoopla, warned that borrowing costs are likely to remain elevated. He stated that house price inflation is drifting towards 0.5% by year-end and annual sales are expected to be closer to 1.1 million versus 1.2 million last year.
Donnell linked global events to the slowdown, noting, "The Middle East conflict has pushed up energy prices and mortgage rates, tempering the autumn rebound in housing activity." He emphasised that getting the right price from the outset is essential, adding that the most challenging pricing decisions face sellers of flats and larger houses across southern England. In contrast, he described the market for affordable two- or three-bed homes in the North of England as strong.
Annual house price growth has slowed to 0.8%, the lowest level for over two years since July 2024.
