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.

UK Housing Market Slows as Buyer Demand Drops and Sales Stall

Three in five homes listed for sale since January remain unsold, according to Zoopla’s latest House Price Index. The report highlights a sharp drop in buyer demand and a slowdown in agreed sales, with higher mortgage rates and political uncertainty cited as key factors.

Zoopla reports that sales agreed over the past four weeks are down 7% compared to the same period last year. Buyer demand has fallen by 15%, as many prospective purchasers delay moving until market conditions become clearer. The rise in mortgage rates to around 5% in April has significantly impacted affordability, with the average monthly mortgage payment increasing by about £125 nationally. For first-time buyers, the increase is more pronounced in London (£232) compared to the North East (£66).

The slowdown in sales is most evident in Wales, where agreed sales are down 12% year-on-year. Other regions experiencing notable declines include the East Midlands (11%), East of England (10%), South West (10%), and London (9%). The West Midlands has seen the steepest drop in buyer demand, down 30% on last year.

Flats remain the weakest-performing segment, with more than two-thirds of one and two-bedroom apartments listed this year still awaiting a buyer. Zoopla notes that higher borrowing costs and stamp duty have particularly affected first-time buyers, especially in London, where purchasing costs are higher than in many northern regions.

The softer market is also reflected in house prices. Annual UK house price growth has slowed to 1.4%. The North East and North West have seen the strongest growth at 3.5%, while Scotland’s values have risen by 3%. In contrast, London has recorded its ninth consecutive month of annual price falls at -0.2%, and prices in the South East are down 0.3%.

Zoopla states that asking price realism will become increasingly important for sellers as the market adjusts to weaker demand and higher borrowing costs.