First-time buyers have paused their moving plans following the Bank of England's decision last week to increase the base rate to 4%. Zoopla reports a 27% reduction in estate agent enquiries from first-time buyers in the past week compared to the same period last year.
This slowdown in buyer enquiries is observed across all property types. The number of sales agreed is tracking 10.5% lower than last year, leading to a 9% increase in the number of homes available for sale.
Richard Donnell, executive director at Zoopla, noted that higher mortgage rates have reduced the buying power of all buyers by an average of 15% since the start of the year. He stated that first-time buyers are crucial to the housing market, accounting for four in 10 sales last year.
The Royal Institution of Chartered Surveyors (Rics) survey aligns with Zoopla's findings, with its members reporting falling or stagnant housing demand. The outlook from Rics members for future property sales over the next 12 months is the most pessimistic since July 2023.
In southern England, the gap between supply and sales is particularly noticeable. The South East has seen homes for sale rise by 12% and sales agreed fall by 16% year-on-year, with house prices decreasing by 0.6%. Conversely, in northern England, the number of homes for sale remains largely unchanged, and house prices continue to rise, with annual growth of 3.2% in the North West and 2.4% in the North East.