Three out of every five homes put on the market since January have failed to find a buyer, according to Zoopla, as a sharp rise in mortgage rates forces potential buyers to pull back. The property portal said agreed sales were 7% below the same period last year, with the slowdown most acute in Wales, where sales fell 12%, and the East Midlands, down 11%.
The jump in mortgage costs was triggered by financial turmoil following the US-Israeli war with Iran, which sent rates soaring in April. The average two‑year fixed rate climbed from 4.83% in early March to a peak of 5.90% on 12 April, according to Moneyfacts. It has since eased to 5.54%, but the damage was immediate: the typical mortgage payment rose by £125 a month compared with January, and by £232 for a first‑time buyer in London. In the north east of England, the hit was far smaller at £66 a month.
“Three in five homes listed since January remain unsold amid high mortgage rates, Zoopla says.”
First‑time buyers bore the brunt of the spike. Overall buyer demand in the UK dropped 15% year‑on‑year, Zoopla said, and the Bank of England reported that mortgage approvals in May fell to a two‑and‑a‑half‑year low.
“The national picture can only tell you so much,” said Richard Donnell, executive director at Zoopla. “For sellers still waiting for an offer, the conversation to have is about price. Correctly priced homes are selling, while overpriced homes are sitting.”
Despite the gloomy figures, Donnell pointed to recent mortgage rate cuts as a glimmer of hope. “Rates are falling, there is more choice of homes for sale than a year ago and motivated sellers are willing to negotiate,” he said. “If you are ready to move, conditions are more favourable than they were three months ago.”