Property buyer enquiries in the UK declined 13% year-on-year in March, according to the latest house price index from Zoopla, as rising mortgage rates and economic uncertainty weighed on market confidence.
Despite the drop in initial enquiries, sales agreed fell by a more modest 2%, indicating that serious buyers continue to progress transactions whilst early-stage purchasers adopt a more cautious approach.
Demand weakens across all regions
Zoopla’s data shows buyer demand has remained below 2024 levels throughout the first quarter, with weakness accelerating in March. Average mortgage rates increased by 0.4 percentage points in recent weeks, contributing to the decline in activity.
Buyer enquiries decreased by between 7% and 19% year-on-year across the country, with the North East and West Midlands recording the largest declines. The trend affected both first-time buyers and existing homeowners equally.
Richard Donnell, Executive Director at Zoopla, said: “The market remains active, but becoming increasingly reliant on a smaller pool of serious buyers. Some early stage buyers are adopting a wait and see approach, but there is a sizeable group of committed buyers who are pressing ahead with housing purchases.”
Price growth holds steady
House price inflation remained stable at 1.3% annually, according to the index. Donnell noted that if mortgage rates stabilise at current levels, sales activity should continue to hold up compared to last year, though affordability is becoming more stretched.
Tomer Aboody, Director at MT Finance, attributed the decline to geopolitical uncertainty and the threat of rising inflation. He criticised government policy, stating: “We have seen a lack of desire from the government to help kick start or boost the property market, and if anything, it has helped create even tougher conditions.”
Jeremy Leaf, a north London estate agent and former RICS residential chairman, offered a more measured assessment: “Although we may have feared the worst, bearing in mind the turmoil in the world and uncertainty over direction of travel for interest rates and inflation, so far the overwhelming majority of our buyers and sellers seem shaken but not stirred.”
Market implications
The widening gap between enquiries and agreed sales suggests the market is consolidating around motivated buyers with finance arrangements in place, whilst speculative interest has diminished. This shift could benefit serious purchasers facing less competition, though affordability constraints remain a significant barrier.
The decline in demand comes as housing costs continue to impact buyers across different segments of the market, with mortgage rate volatility adding further complexity to purchasing decisions.
The data indicates that whilst the UK property market remains functional, activity levels are increasingly dependent on buyers with firm moving requirements rather than aspirational purchasers waiting for more favourable conditions.
