War Fears Dampen UK Buyer Demand: Zoopla Report

Buyer demand in the UK housing market experienced a 13% decrease in March compared to the previous year, largely influenced by global conflicts and rising mortgage rates. This has led potential movers to adopt a cautious 'wait and see' stance. The average two-year fixed mortgage rate has seen a significant increase, rising from 4.83% at the beginning of March to 5.77% currently.

Lenders have responded by hiking mortgage rates and withdrawing products amidst fluctuating interest rate expectations. Despite these challenges, UK house prices have maintained a steady annual inflation rate of 1.3%. Price growth has been most pronounced in more affordable areas, with the North West of England recording a 3.5% year-on-year increase. A smaller, dedicated group of serious buyers continues to drive market activity.

Zoopla data indicates a year-on-year decline in buyer inquiries, ranging from 7% to 19%, with the most substantial drops observed in the North East and West Midlands. Agreed sales have slipped by 2% annually. The market is currently supported by approximately a quarter of transactions being cash purchases and existing homeowners with substantial equity, mitigating the impact of higher mortgage rates for some.

Looking forward, Zoopla does not anticipate a slowdown in house price growth in the immediate future, provided buyer activity remains stable. A sustained decline in buyer activity and sales volumes would be necessary to impact current growth rates. The article also provides guidance on securing mortgages, advising buyers and remortgagers to explore options early and compare rates.