Housing market softens while relying on ‘smaller pool of serious buyers’
According to property website Zoopla, homebuyer demand across the UK softened in March; This trend is attributed to global uncertainty worsened by rising mortgage rates and ongoing conflict in the Middle East.
The portal reported a 2% annual decline in agreed sales, noting that the market was largely supported by determined buyers who had already secured mortgage contracts.
Despite the overall slowdown, some parts of the UK, including Wales, Yorkshire, the Humber and London, saw agreed sales remain flat or even slightly up on last year. However, buyer inquiries have decreased by 13% year-on-year, indicating that potential buyers are increasingly adopting a cautious, “wait and see” approach before entering the market.
It was stated that buyer demand remained below last year’s levels in the first three months of the year.
The overall number of homes for sale increased by 6% annually; This reflects homeowners’ continued desire to move despite a more uncertain environment.
Zoopla said a significant proportion of transactions were less sensitive to rising mortgage rates.
While nearly a quarter of sales were cash purchases, many existing homeowners mitigated the impact of higher mortgage rates by building equity and securing a loan in advance.
This helps support sales in the short term, but also highlights increased reliance on homebuyers who are less sensitive to mortgage interest rates, the report said.
Overall, house price inflation in the UK remains stable, with annual growth of 1.3%.
Zoopla said price growth was strongest in more affordable areas, with the north-west of England recording an annual increase of 3.5%.
Lenders are scrambling to raise mortgage rates and withdraw some products due to changing expectations in financial markets.
Swap rates that lenders use to set mortgage prices are increasing.
According to Zoopla, annual house price changes are as follows:
London, minus 0.2%
South East, minus 0.2%
South West, 0.0%
East of England, 0.6%
East Midlands, 1.2%
West Midlands, 1.9%
Wales, 2.1%
Yorkshire and Humber, 2.2%
Scotland, 2.6%
North East, 2.8%
North West, 3.5%
Northern Ireland, 7.2%
Zoopla Executive Director Richard Donnell said: “The market remains active but is increasingly reliant on a smaller pool of serious buyers.
“Some early-stage buyers are taking a wait-and-see approach, but there is also a sizeable group of determined buyers who are continuing to purchase homes.”
Zoopla’s house price index measures the change in house prices where sales are agreed.
The data on agreed sales and buyer demand covers the four weeks to March 22, compared with a year ago. House price figures cover the period until the end of February.
