The UK housing market has hit the brakes, with new figures showing a sharp slowdown in buyer activity and a rise in unsold properties. Three out of five homes listed for sale since January remain on the market, while sales agreed over the past four weeks are down 7% year-on-year – a trend that's fuelling a nationwide deceleration in house price growth to just 1.4%.
Regional differences are emerging, with London continuing to see property values decline and northern England experiencing continued price increases. This regional divergence highlights the absence of a single national housing market, where local factors play a crucial role in determining trends. Elevated mortgage rates, coupled with broader economic and political uncertainties, are being cited by property professionals as key deterrents for potential buyers.
Industry experts have sounded caution over the Zoopla report's findings. Jeremy Leaf, a North London estate agent, warned of 'too much property on the market' and ongoing global and domestic political uncertainties that he described as 'lethal' to confidence. He noted sales are taking longer to complete, but most agreed sales are proceeding at a slower pace with fewer price renegotiations.
Tom Bill, head of UK residential research at Knight Frank, expressed concern over the potential for further demand dampening due to 'a summer of tax speculation'. He suggested that buyers and sellers may not get a chance to recover from the spring bounce being cut short by higher mortgage costs linked to international conflicts. The uncertainty extends beyond a proposed Budget to the identity of future Chancellors and the feasibility of property tax reforms, many of which may take years to implement.
Nigel Bishop of Recoco Property Search observed house hunters remain 'cautious amid the UK's volatile economy' with interest rates at 3.75%, making a significant surge in buyer activity unlikely. Nathan Emerson, CEO of Propertymark, acknowledged that economic and political factors influence confidence but noted life events like job changes or growing families continue to drive property moves. He stressed that confidence has softened rather than disappeared, making realistic pricing and expert local advice more critical than ever for navigating these challenging conditions.
Marc von Grundherr, director at Benham and Reeves, highlighted affordability as the 'defining force' in today's market, explaining why London, with its already high property prices and increased mortgage costs, is feeling the greatest impact.