Higher mortgage rates put buyers in the driving seat
Market conditions vary locally: three in four Scottish homes find a buyer within three months, compared with just three in ten in London
- Mortgage rates now average 5.2 per cent, the highest level in three years, adding £150 a month (£1,800 a year) to typical repayments and further cooling buyer demand
- Homes for sale are up five per cent year-on-year while sales agreed have fallen nine per cent, widening the gap between supply and demand, most acute in London and southern England
- Scotland is bucking the wider slowdown: house prices are up 3.3 per cent and flats up 2.1 per cent year-on-year, sales agreed are down just 1 per cent, and three-quarters of homes find a buyer within three months
- A quarter of homes newly listed this month have been on the market before, most often flats and larger homes; six in ten of these have been relisted at a lower price
- Flat prices have fallen for 15 consecutive months while house prices are still rising by 2–2.5 per cent a year, pulling overall annual growth down to 0.8 per cent across all property types
- Zoopla expects house price growth to slow further to around 0.5 per cent by year-end, with UK sales for 2026 forecast at 1.1 million, down from 1.2 million in 2025
Higher mortgage rates over the summer have pushed up the cost of buying, contributing to a nine per cent fall in the number of sales being agreed versus last year. Annual house price growth has also slowed to 0.8 per cent, the lowest level for over two years since July 2024, according to the latest Zoopla House Price Index.
With average mortgage rates at over five per cent (5.2 per cent), their highest level for three years and up from four per cent at the start of the year, the average homebuyer now faces an extra £150 per month (£1,800 a year) in mortgage repayments. Higher buying costs are weighing on demand with sales agreed falling across every region and country of the UK.
A quarter of homes listed in September have been on the market before
A quarter of newly listed homes listed for sale this month have been previously listed for sale in the last year. Six in ten are returning at a lower asking price, which helps improve saleability if the cuts align to what buyers are prepared to pay, while the rest have been listed at their previous price. These relistings are most common among flats and larger houses, which are generally taking longer to find buyers. In London, a third of flats coming onto the market have been listed before, compared with fewer than one in ten in Scotland.
These homes are returning to a market where buyers have more choice. The number of homes for sale is five per cent higher than a year ago while sales agreed over the past four weeks are nine per cent lower. This imbalance is clear across much of the country, particularly London and southern England, where the number of homes for sale is eight per cent higher than last year. Sales agreed have fallen most sharply in the West Midlands down 15 per cent year on year and the East of England down 14 per cent. Scotland remains relatively resilient, seeing a smaller decline of one per cent, whilst the number of homes for sale is up three per cent.
Figure 1: Growing gap between supply growth and sales
Flats continue to fall in value as growth in house prices slows
The average price of a UK home is currently £273,000. House price growth has slowed to 0.8 per cent across all types of property, down from 1.7 per cent a year ago and 0.9 per cent last month.
The picture varies between flats and houses. Flat prices have been falling for 15 months, since May 2025. House prices have continued to rise, with annual growth of around two to 2.5 per cent over the last year although this has slowed in recent months as a result of higher mortgage rates and fewer sales. Some sellers are accepting lower offers on homes while others are listing their homes at more realistic asking prices to attract buyers.
Figure 2: Higher mortgage rates hit price growth
Affordability shapes regional house price growth
The variation in house price growth between flats and houses is very different across Britain. House prices are rising fastest in Northern Ireland followed by the North West, up 3.6 per cent year on year, followed by Scotland at three per cent and the North East 2.4 per cent. Growth in house values has stalled across much of southern England where property values are higher and more sensitive to higher borrowing costs. Flat prices are falling in almost every region, with Scotland and the North East the notable exceptions.
Figure 3: Year on year price change for flats and houses to August 2026
| Region | Houses | Flats |
| Northern Ireland | 6.7% | 0.8% |
| North West | 3.6% | -0.6% |
| Scotland | 3.3% | 2.1% |
| North East | 2.4% | 1.9% |
| Wales | 2.3% | -2.4% |
| West Midlands | 2.0% | -1.1% |
| Yorkshire and The Humber | 1.6% | -0.9% |
| East Midlands | 1.1% | -2.9% |
| London | 0.8% | -2.6% |
| East of England | 0.0% | -1.5% |
| South West | -0.2% | -1.7% |
| South East | -0.3% | -2.0% |
| UK | 1.3% | -1.3% |
Source: Zoopla House Price Index
Regional price trends are reflected in how quickly homes find buyers. Around three-quarters of homes listed in Scotland find a buyer within three months, compared with approximately half in northern England and just three in ten in London. More affordable markets are generally seeing stronger sales and modest price growth, while higher borrowing costs and greater buyer choice are weighing on prices in more expensive markets.
These differences extend to property types. More affordable two and three-bedroom houses generally attract stronger demand, while flats and larger family homes face more challenging conditions in many areas, particularly southern England.
For anyone looking to move, national and regional house price trends tell only part of the story. Buyers and sellers need to understand local demand, what buyers can afford and how many competing homes are available. A local estate agent can help sellers set a realistic asking price and buyers judge what to offer.
Figure 3: Chances of finding a buyer within 3 months varies widely across Britain
Richard Donnell, Executive Director at Zoopla, says, “The Middle East conflict has pushed up energy prices and mortgage rates, tempering the autumn rebound in housing activity. Borrowing costs are likely to remain elevated, with house price inflation drifting towards 0.5 per cent by year-end and annual sales expected to be closer to 1.1 million versus 1.2 last year.
“While key measures of housing market activity are lower than last year, there is still plenty of demand for homes. Buyers are simply more cautious and selective about what they view and offer. Sellers who factor in local market conditions and seek detailed advice from their local estate agents on how to set the asking price, can still find a buyer relatively quickly.
“Getting the right price from the outset is essential. If you are selling an affordable two or three bed home in the North of England it is a strong market. The most challenging pricing decisions face sellers of flats and larger houses across southern England.”
You May Also Enjoy
First-time buyer enquiries fall 27% as borrowing costs rise
Homes completing on Friday the 13th sell for less
Surrey, Herts & Bucks named most exclusive markets
Friday the 13th spooks home-movers
Section 21 reform divides landlords and tenants
