Editor's note: This brief was summarised by The Property AI Newsroom from a report by Property Industry Eye. Read the original article for full details.
Buyer Searches Increase Across UK Despite Mortgage Rate Pressures
Buyer activity in the UK housing market has started to recover following the summer slowdown, according to the latest Zoopla House Price Index. The number of people searching for homes has increased by 7% compared with a year ago, marking the strongest annual rise since mortgage rates increased in the spring.
Zoopla reports that sales agreed remain 6% below last year’s level, but the gap is narrowing as buyers return to the market after several quieter months. The property portal notes that average five-year fixed mortgage rates have risen from below 4% in January to around 4.8%. This has reduced household borrowing power by 9% since the start of the year.
Zoopla estimates that a buyer who could previously borrow £200,000 for a given monthly repayment can now borrow approximately £182,000 on the same terms. To maintain the same borrowing level without increasing monthly repayments, the average buyer would need to contribute an additional £18,200 towards their deposit. This figure varies by region, with buyers in London needing to find an additional £35,500, compared with £10,200 in the North East.
The impact of higher mortgage rates is particularly significant for first-time buyers, who typically borrow a greater proportion of a property’s value and often take mortgages over longer terms.
Regional Trends and Market Stock
Buyer search activity has increased across every UK region and country for the first time since August 2025. The South East saw the strongest annual increase in searches at 8.9%, followed by the East of England at 8.5%. The North West recorded the smallest increase at 0.7%.
The rise in searches is seen as an early indicator of demand, with improvements expected to take time to translate into enquiries and agreed sales. The number of newly listed properties is close to last year’s level, and overall stock is 5% higher than a year ago. This provides buyers with greater choice and limits sellers’ ability to increase asking prices. Late August and early September typically see an increase in price reductions as vendors reposition properties ahead of the autumn market.
House Price Growth Slows
UK house price growth slowed to 0.9% year-on-year in July, down from 1.3% a month earlier. Prices are flat or falling across much of southern England, with annual declines ranging from 0.3% in the South East to 1% in London. Growth remains stronger in the North and Midlands, with prices up 1.7% in Yorkshire and 3.1% in the North West. Northern Ireland recorded the strongest annual increase at 5.4%.
Source: Property Industry Eye