Home searches across the UK have increased by 7% year-on-year following a quiet summer period, according to new data from Zoopla, though buyers are facing a 9% reduction in purchasing power due to rising mortgage costs.
The property portal reported that searches have risen across every region and country for the first time since August last year, marking what Richard Donnell, Executive Director of Zoopla, described as “a nationwide trend and the first time searches for homes are up across Britain this year.”
Regional variations
The South East recorded the strongest increase at 8.9%, followed by the east of England at 8.5%. The north west saw the smallest rise at 0.7%.
The uptick in search activity comes despite significant affordability pressures. Average five-year fixed mortgage rates have climbed from below 4% in January to approximately 4.8% currently.
According to Zoopla’s calculations, a borrower previously able to afford a £200,000 mortgage can now only borrow around £182,000 for the same monthly payment. To maintain unchanged repayments, the average buyer would need to add £18,200 to their deposit. In London, this figure nearly doubles to £35,000, while buyers in the North East would require an additional £10,200.
Sales activity remains subdued
Despite increased search activity, sales agreed are down 6% year-on-year. The number of homes for sale stands 5% higher than a year ago, providing buyers with greater choice in the market.
Donnell noted that “many buyers have taken a ‘wait and see’ approach over the summer months in response to higher borrowing costs and political uncertainty.” He identified mid-July, around the time of the World Cup final, as the low point for activity, with searches increasing steadily since then.
Tom Bill, head of UK residential research at Knight Frank, suggested the autumn activity bounce “should be more noticeable than it was in the spring,” though he cautioned that increased Budget tax speculation from September could impact market momentum.
Jeremy Leaf, a north London estate agent and former RICS residential chairman, reported seeing “modest rises in mortgage costs” reinforcing buyer negotiating power, resulting in lower offers, particularly for flats. He noted that “only relatively few sellers are recognising the new realities” in pricing.
Market outlook
Nathan Emerson, Chief Executive of Propertymark, cautioned that renewed interest “should not be mistaken for a full recovery in transactions just yet.” He highlighted that the additional deposit requirements present particular challenges for first-time buyers, though he noted that increased housing stock is helping keep price growth in check.
The ongoing pressures in the UK housing market continue to affect buyer affordability. Market observers suggest that local expertise will prove important this autumn, with sellers needing to price properties carefully to attract interest in varied market conditions across the country.
Donnell advised that “motivated sellers need to price carefully to attract interest and bids” and should seek advice from local agents, as market conditions vary widely across the country.
