Buyer demand weakens, but committed movers keep transactions moving
Sales activity in the UK housing market has remained relatively steady despite higher uncertainty linked to events in the Middle East, Zoopla has reported, as market volatility feeds through into mortgage pricing and softens buyer appetite.
According to the latest Zoopla House Price Index, demand has trailed last year’s levels through the first three months of 2026, with momentum fading further in March. Buyer enquiries were 13% lower than a year earlier, as would-be purchasers adopted a more cautious stance.
Mortgage rates have moved higher over the past month, with average pricing up by 0.4 percentage points, Zoopla said. It added that many deals priced below 4% had been withdrawn as markets adjusted to uncertainty around the inflation outlook.
Despite the fall in enquiries, agreed sales have been more resilient, down 2% year on year. Zoopla attributed this to a cohort of buyers already committed to moving, including those with offers in place or a clear need to proceed.
The gap between weaker demand and steadier sales was evident across regions. Enquiries were reported to be down by between 7% and 19% compared with last year, with the North East and West Midlands showing the sharpest reductions, albeit after stronger activity a year ago.
Agreed sales have held up more consistently, particularly in northern regions. Zoopla said transactions were flat or slightly higher in Wales, Yorkshire and the Humber, and London.
The number of homes for sale has risen by 6% over the past year, suggesting that many owners still intend to move, despite the more unsettled backdrop.
Zoopla also highlighted that a notable share of transactions is less exposed to mortgage rate changes. About a quarter of sales are cash purchases, while some existing owners have built up equity or arranged borrowing in advance, reducing the immediate impact of higher rates.
House price inflation has remained stable at 1.3% year on year, Zoopla said, with regional performance uneven. Growth was strongest in more affordable areas, with the North West recording annual gains of 3.5%. In southern England, price falls have moderated in recent months, even as demand has softened.
Zoopla said it did not expect near-term price growth to slow, unless weaker activity becomes more sustained and starts to reduce sales volumes.
“The market remains active, but becoming increasingly reliant on a smaller pool of serious buyers,” said Richard Donnell (pictured right), 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.
“If mortgage rates stabilise at current levels, we expect sales activity to continue to hold up well compared to last year. 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.
“For buyers, there is less competition and more choice, but affordability is becoming more stretched. 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.”
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