Home-buying activity is beginning to recover after a quieter summer, although higher mortgage rates continue to put pressure on affordability.
Zoopla found that the number of people searching for homes rose by 7% in the four weeks to 16 August compared with the same period last year. For the first time in 12 months, buyer searches increased across every UK region, with particularly strong activity in the East and South East of England and Wales.
Buyer Interest Begins to Recover
The rise in searches suggests more people are starting to consider moving home again. However, Zoopla cautioned that increased searches do not immediately translate into enquiries or completed sales.
The number of properties available for sale was also 5% higher than a year earlier, giving buyers more choice. However, the number of newly listed homes remained below last year’s level.
Zoopla said buyer activity had been affected by higher borrowing costs and uncertainty earlier in the year. Mortgage rates increased following market volatility linked to the conflict in the Middle East, although they have gradually eased since spring.
Average five-year fixed mortgage rates have risen from below 4% in January to around 4.8%. This has reduced the amount buyers can borrow while keeping monthly mortgage payments at the same level.
House Prices Continue to Rise
Despite the affordability challenges, UK house prices continued to record modest annual growth.
Zoopla’s house price index showed that average property prices increased by 0.9% year-on-year in July to £272,800. This was slower than the 1.3% annual growth recorded in June.
The combination of slower price growth, higher mortgage costs and increased property stock could give buyers more room to negotiate, although affordability remains a major consideration.
Buyers Return After Summer Lull
Richard Donnell, executive director at Zoopla, said many buyers had taken a cautious approach during the summer because of higher borrowing costs and political uncertainty.
He said the number of people searching for homes had steadily increased since activity reached a low point in mid-July, suggesting buyers were beginning to prepare for a stronger post-summer market.
Donnell also noted that mortgage rates have stabilised but remain closer to 5% than 4%, meaning affordability is still likely to influence purchasing decisions.
What This Means for Property Investors
The increase in buyer searches could be a positive sign for the UK property market after a quieter summer. More active buyers may support transaction levels and provide opportunities for sellers who have been waiting for demand to improve.
However, higher mortgage rates mean buyers remain price-sensitive. Investors and landlords looking to sell may therefore need to take current borrowing costs and affordability into account when pricing properties.
For those considering their next purchase, the rise in buyer activity suggests competition could increase as the market moves into the post-summer period. At the same time, the higher level of available stock means buyers may still have more choice than in previous years.
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