First-time buyer enquiries have fallen by 27% year-on-year, as increased mortgage rates lead more potential homeowners to delay their plans. This sharp decline in demand follows the Bank of England's decision to raise the Bank Rate to 4%, according to new figures from Zoopla.
The wider housing market is also experiencing a slowdown. Sales agreed decreased by 10.5% year-on-year in the week leading up to 8 November, while the number of available homes for sale rose by 8.6%. Higher borrowing costs are estimated to have reduced buyers' purchasing power by 15% since the beginning of the year.
Southern England is particularly affected, with property listings increasing despite falling sales. In the South East, available stock went up 12.4% annually, while sales agreed dropped 16.2%, and house prices fell 0.6%. London saw a 6.1% fall in sales agreed and a 1% annual drop in average house prices, with available stock increasing by 6%.
In contrast, Northern England continues to show annual house price growth, with prices up 3.2% in the North West and 2.4% in the North East. However, sales agreed in these regions fell by 16.4% and 23.5% respectively. Scotland was the only region to record an annual increase in sales agreed, up 1.4%, with house prices also rising 2.5%.
Despite the weaker demand, first-time buyers who can secure mortgage finance now have more properties to choose from. Zoopla reported a 14% annual increase in two-bedroom houses for sale and a 13% increase in properties priced below £200,000.