UK house sales plummet as higher mortgage rates bite
Key Points
- The UK's property market is straining under increasing mortgage rates and political uncertainty.
- Sales agreed are falling across the country, and house price growth is slowing steadily.
- In London, house prices have fallen for the ninth month in a row, with similar declines across the South of England.
- Even in areas such as Scotland and the North East where house price growth is stronger, it is generally in line with inflation.
Political uncertainty and rising mortgage rates are having a heavy impact on the UK’s housing market, with prices stalling and sales in freefall.
According to the latest data from online property platform Zoopla, sales agreed in the four weeks to 21 June 2026 have fallen by 7% year-on-year.
Three in five homes that were listed for sale in January are still on the market, and demand from buyers has fallen by 15% year-on-year, a phenomenon Zoopla attributes to an April spike in mortgage prices and political uncertainty over the resignation of Starmer and what this might mean for the country’s tax policy going forward.
In April, rising mortgage rates saw the average first-time buyer’s costs in London rise by £232, but for those in the North East, the rise was only £66.
Buyers and sellers both seem to be adopting a wait-and-see approach to property sales, and Zoopla pointed to a previous occasion when the UK housing market absorbed economic and political uncertainty, during Liz Truss’s disastrous 2022 mini-budget, which saw sales agreed plummet by more than 20% before stabilising.
The background to this fall in sales agreed today, however, is a steady collapse in house price growth across the country.
House price growth is collapsing
UK property prices vary highly according to region, and there are exceptions where house price growth is strong, but in the busiest and biggest regions where demand is historically high, prices are steadily falling.
The decline is most prominent in London, where house prices have fallen for nine months in a row, falling by 0.2% in May. The same trend holds true for the South East of England, with house prices falling by 0.3% on average last month.
Even the strongest performing regions in the UK, such as the North East and North West, are seeing house price growth roughly keep pace with inflation at around 3%.
Across the UK generally, house prices have only grown by 1.4% year-on-year, and Zoopla said it expects this to fall further unless mortgage rates fall and sales recover.
“Higher mortgage rates have hit sales and squeezed affordability for home buyers alongside increased political uncertainty,” said Zoopla executive director Richard Donnell.
“The impact is less severe than what the market faced after the 2022 mini-budget, and mortgage rates have started to fall.”
“It’s a buyer’s market across much of the South right now, but motivated sellers in northern England and Scotland are still finding buyers at broadly last year’s pace which shows the housing market is not moving at one speed,” he said.
