"If mortgage rates stabilise at current levels, we expect sales activity to continue to hold up well compared to last year,"
- Richard Donnell - Zoopla
The UK housing market is holding its ground despite rising geopolitical uncertainty, with sales activity supported by a narrowing pool of committed buyers even as mortgage rates climb and broader demand softens, according to Zoopla's latest House Price Index.
Buyer demand has fallen 13% year-on-year in March, with potential purchasers adopting a cautious, wait-and-see approach as events in the Middle East push up borrowing costs.
Average mortgage rates have risen by 0.4 percentage points over the past month, with many sub-4% deals withdrawn as financial markets adjust to renewed inflation uncertainty.
Sales agreed, however, are proving more resilient, registering a decline of just 2% year-on-year. That gap between weakening demand and steadier transaction volumes points to one clear driver: buyers who already hold mortgage offers or face pressing personal reasons to move are continuing to push ahead regardless.
"The market remains active, but is becoming increasingly reliant on a smaller pool of serious buyers," said Richard Donnell, executive director at Zoopla. "Some early-stage buyers are adopting a wait-and-see approach, but there is a sizable group of committed buyers who are pressing ahead with housing purchases."
A widening gap between demand and sales
The divergence between buyer enquiries and sales agreed is visible across every region. Enquiries are down between 7% and 19% year-on-year, with the steepest falls recorded in the North East and West Midlands, though both regions are declining from a particularly strong base in 2025.
Sales agreed are holding up more consistently. Declines in northern England are modest, and Wales, Yorkshire and the Humber, and London are all recording flat or marginally higher completions compared to a year ago.
The total number of homes listed for sale has risen 6% year-on-year, suggesting homeowners retain a genuine appetite to move despite the uncertain backdrop. That supply increase has not yet translated into price pressure, but it does mean buyers have more choice than at the same point last year.
Structural factors are also cushioning the market against the full force of higher mortgage rates:
- Around a quarter of all sales are cash purchases, insulating that portion of the market entirely.
- Many existing homeowners have built up equity and locked in borrowing in advance.
- First-time buyers and existing homeowners are showing identical demand trends, with no meaningful divergence between the two groups.
These factors are supporting near-term sales volumes, though they also point to a growing dependence on buyers who are least sensitive to rate movements.
House price growth holds at 1.3%
UK house price inflation remains stable at 1.3% year-on-year, with no immediate impact from the recent demand softening. Regional disparities persist. The North West is recording the strongest growth at 3.5% annually, while price falls across southern England have eased in recent months despite weaker buyer activity.
Zoopla does not anticipate a slowdown in house price growth in the near term, though it acknowledges the outlook is conditional. A sustained decline in buyer activity and sales volumes would be required before current growth rates come under meaningful pressure.
"If mortgage rates stabilise at current levels, we expect sales activity to continue to hold up well compared to last year," Donnell added. "Further increases in borrowing costs could weaken demand and impact sales volumes later in the year. The outlook is far from clear, although we can see demand has stabilised over recent days."
What it means for buyers and sellers
For those already in the market, the near-term picture is one of selective activity rather than broad paralysis. Buyers face less competition and greater choice than in recent years, but stretched affordability means fewer can comfortably absorb rate increases.
Sellers are not facing a cliff edge in pricing, but buyers have grown more selective and price-conscious. Zoopla's data makes clear that realistic asking prices, guided by local market knowledge, will be decisive in securing sales in the months ahead.
"For buyers, there is less competition and more choice, but affordability is becoming more stretched," Donnell said. "For sellers, homes are still selling, but buyers are more selective and price-sensitive. Setting a realistic asking price with the help of a local agent will be critical to securing a sale."
