35% of UK homes are in postcode areas where house prices are falling
House price falls spread to a third of homes as sellers face growing competition for buyers
- More than a third (35 per cent) of UK homes are in postcode areas where house prices are falling, up from 12 per cent a year ago
- Price falls are concentrated in London and the South East where 85 per cent of homes are in local markets with price falls
- House prices are still rising across most other regions with average prices £6,600 higher in the North West over the last year versus a £5,400 average decline in London
- Home sales agreed in the last four weeks have fallen seven per cent compared to last year, while the number of homes for sale has risen seven per cent, giving buyers more choice and increasing competition between sellers
- Homes finding buyers are selling just as quickly as last year, showing that demand remains but higher mortgage rates are making buyers more selective
- Reform of the five per cent stamp duty band in Wednesday’s Budget would support the market in southern England, while the Your First Home scheme could help up to 10 per cent of first time buyers buy a new home
More than a third (35 per cent) of UK homes are in postcode areas where house prices are falling, up from 12 per cent a year ago according to the latest House Price Index from Zoopla, one of the UK’s leading property websites. Zoopla’s index tracks house prices across 119 postcode areas and prices are falling in 37.
Higher mortgage rates have increased the cost of buying and made buyers more selective. The number of sales agreed over the last four weeks is seven per cent lower than a year ago across the UK.
At the same time, the number of homes for sale is seven per cent higher than last year, giving buyers more choice and greater room to negotiate. This, in turn, is also putting greater pressure on sellers to price their properties competitively to attract buyer interest.
One third of homes in markets registering house price falls
The average UK house price now stands at £273,100, which is 0.8 per cent higher than last year although the national figure masks significant regional and local differences.
The greatest pressure on house prices is in southern England where higher mortgage rates are adding the most to buyers’ monthly mortgage payments. Average home values are falling by one per cent in London with the average home now £5,400 lower than a year ago. In contrast, the average home in the North West is worth £6,600 more than a year ago, an increase of 3.2 per cent.
At a more localised level, 85 per cent of homes in London and the South East are in postcode areas with price falls. Three quarters of homes in the Eastern region and 42 per cent in the South West are located in postcode areas registering price falls. The largest price falls are concentrated across North West London (-2.2 per cent) and WC London (-5.7 per cent) but also along the south coast including Bournemouth (-1.7 per cent), Truro (-2.2 per cent) and Torquay (-1.7 per cent).
House prices are rising across the rest of the country where homes are more affordable and the impact of higher mortgage rates is less pronounced. There are still areas of the country where home values are rising by more than three per cent, particularly across the North West and Scotland. House prices are rising by more than four per cent in Liverpool , Carlisle and Kilmarnock postcode areas.
Buyers are still active but sellers pricing too high are being left behind
Despite buyers becoming more cautious, homes that find a buyer are selling just as quickly as a year ago, taking an average of 44 days nationally, with faster sales in more affordable areas.
However, with buyers having more choice, getting the asking price right from the outset is increasingly important. Zoopla analysis of homes listed for sale between April and June 2026 shows that 41 per cent of homes listed five per cent or more below their estimated value found a buyer within 90 days, compared with just 26 per cent of those priced at least 20 per cent above their estimated value.
Reducing the asking price later is no guarantee of finding a buyer. Just 19 per cent of homes that underwent a price reduction sold within 90 days, compared with 41 per cent of those without a reduction. This highlights the greater sales success associated with realistic initial asking prices.
Budget offers opportunity to ease pressure on homebuyers
With higher mortgage rates weighing on sales, particularly across southern England, the upcoming Budget offers an opportunity to address some of the costs holding buyers back.Extending the two per cent stamp duty band to £500,000 would save home movers up to £7,500, while similar reforms for first-time buyers could save up to £6,000, although changes would come at a cost to the Exchequer.
Additionally, the proposed Your First Home scheme could stimulate demand for new homes by helping first-time buyers with limited deposits. Zoopla estimates that, with appropriately set local price caps, around a third of new homes could qualify, potentially supporting up to 30,000 purchases annually, equivalent to one in ten first time buyer purchases. Its success will depend on setting local price caps that reflect what buyers can afford and the prices of available new homes.
Richard Donnell, Executive Director at Zoopla, says, “The extra cost of mortgages has made home buyers more selective while greater choice of homes for sale has increased the scope to negotiate on price. The impact is being felt by sellers in southern England where house price falls are most concentrated as average prices continue to rise across the rest of the country.
“There is still demand to buy homes, and those that are well priced and presented are selling just as quickly as last year. Getting the price right from the start is essential. Overpricing significantly reduces the chances of selling, so sellers should seek advice from local agents on buyer demand and the right asking price for their home.”
Commenting on how Wednesday’s Budget might impact the housing market: “The biggest boost the Budget could provide to the housing market would be to create the conditions for lower mortgage rates. We expect activity to strengthen once mortgage rates start moving back below five per cent. Changes to stamp duty could support buyers and sellers, particularly in southern England where transaction costs are highest. The Your First Home scheme is positive for the new homes industry and, if designed well, could stimulate demand and support wider housing market activity in 2027.”
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