House price falls now affect more than a third of UK homes, according to the latest House Price Index from property portal Zoopla.
The index shows 35% of homes sit in postcode areas where prices are dropping, up from 12% a year ago. Zoopla tracks 119 postcode areas, and prices are falling in 37 of them.
Higher mortgage rates have raised the cost of buying and made buyers more selective. Sales agreed over the four weeks to 18 October ran 7% below the same period last year, while the number of homes for sale rose 7%. Buyers now have more choice and more room to negotiate, which puts pressure on sellers to price competitively.
The average UK house price stands at £273,100, up 0.8% on last year, although the national figure masks wide regional and local differences.
House price falls concentrated in southern England
The greatest pressure sits in southern England, where higher mortgage rates add the most to monthly payments. London values are down 1%, leaving the average home at £523,100, or £5,400 lower than a year ago.
The South East (down 0.6%), Eastern region (down 0.5%) and South West (down 0.4%) also recorded annual falls. In contrast, the average North West home is worth £6,600 more than a year ago, a rise of 3.2%, while Scotland (up 2.5%) and Northern Ireland (up 5.8%) also posted gains.
At a local level, 85% of homes in London and the South East are in postcode areas with price falls. The same applies to three-quarters of homes in the Eastern region and 42% in the South West.
The largest house price falls are in WC London (down 5.7%) and North West London (down 2.2%), along with south coast markets including Truro (down 2.2%), Bournemouth (down 1.7%) and Torquay (down 1.7%).
Prices are still rising across the rest of the country, where homes are more affordable and higher mortgage rates have less impact. Values are climbing by more than 3% in parts of the North West and Scotland, and by more than 4% in the Liverpool, Carlisle and Kilmarnock postcode areas.
“The extra cost of mortgages has made home buyers more selective while greater choice of homes for sale has increased the scope to negotiate on price,” said Richard Donnell, executive director at Zoopla.
“The impact is being felt by sellers in southern England, where house price falls are most concentrated, as average prices continue to rise across the rest of the country. There is still demand to buy homes, and those that are well priced and presented are selling just as quickly as last year.
"Getting the price right from the start is essential. Overpricing significantly reduces the chances of selling, so sellers should seek advice from local agents on buyer demand and the right asking price for their home.”
Homes that find a buyer are selling as quickly as a year ago, taking an average of 44 days nationally, with faster sales in more affordable areas. However, with buyers having more choice, the asking price matters more from the outset.
Zoopla analysed homes listed between April and June 2026 and found that 41% of those priced 5% or more below their estimated value found a buyer within 90 days, compared with 26% of those priced at least 20% above.
A later reduction offers no guarantee. Only 19% of homes that underwent a price cut sold within 90 days, against 41% of those without one.
Zoopla also points to Wednesday’s Budget as a chance to ease costs holding buyers back. Extending the 2% stamp duty band to £500,000 would save home movers up to £7,500, while similar reforms for first-time buyers could save up to £6,000, although changes would cost the Exchequer.
The proposed Your First Home scheme could also stimulate demand for new homes by helping first-time buyers with limited deposits. Zoopla estimates that, with appropriately set local price caps, around a third of new homes could qualify, potentially supporting up to 30,000 purchases a year, equivalent to one in ten first-time buyer purchases. Its success will depend on price caps that reflect what buyers can afford and the prices of available new homes.
“The biggest boost the Budget could provide to the housing market would be to create the conditions for lower mortgage rates,” Donnell added.
“We expect activity to strengthen once mortgage rates start moving back below five per cent. Changes to stamp duty could support buyers and sellers, particularly in southern England where transaction costs are highest. The Your First Home scheme is positive for the new homes industry and, if designed well, could stimulate demand and support wider housing market activity in 2027.”
Industry reactions
Tom Bill, head of UK residential research at Knight Frank, commented, “Sellers increasingly need to reflect the tougher mortgage rate landscape when setting asking prices. Buyers’ budgets are being squeezed as the Middle East conflict sends borrowing costs higher, but the overall number of mortgage approvals has also fallen, which has weakened demand further.
"Price growth has effectively ground to a halt this year, and we expect the downward pressure to continue in the final months of the year, which may be aggravated by this week’s Budget.”
Nathan Emerson, CEO at Propertymark, said, “The housing market is becoming increasingly localised, with higher mortgage costs putting pressure on affordability, particularly in southern England. While increased choice is giving buyers greater scope to negotiate, realistic pricing and informed advice from property professionals remain essential to achieving successful sales.
“Despite regional price falls, demand remains, but buyers are increasingly selective and focused on value. Ultimately, market confidence will depend on improved affordability, access to suitable housing and the ability of buyers and sellers to move with confidence.”
