Buyer activity has begun to recover after the summer slowdown, despite higher mortgage rates reducing household borrowing power by 9% since the start of the year, Zoopla's latest House Price Index reveals. The number of people searching for homes has increased by 7% compared with a year ago, marking the strongest annual rise since mortgage rates went up in the spring.
Sales agreed remain 6% below last year’s level, though Zoopla noted this gap has started to narrow as buyers return to the market. Average five-year fixed mortgage rates have increased from below 4% in January to approximately 4.8%.
This rise in rates means a buyer previously able to borrow £200,000 for a specific monthly repayment could now borrow around £182,000. To maintain the same borrowing level without increasing monthly repayments, an average buyer would need an additional £18,200 for their deposit, with this figure varying by region.
Buyer search activity has increased across every UK region and country for the first time since August 2025. The strongest annual increases were seen in the South East, up 8.9%, and the East of England, up 8.5%. Meanwhile, UK house price growth slowed to 0.9% year-on-year in July, down from 1.3% a month earlier.