UK Housing Market Slows as Three in Five Homes Remain Unsold

Nearly three in five homes listed for sale since the start of the year are still waiting to find a buyer, according to the latest House Price Index from Zoopla, highlighting a slowdown in the UK property market as higher mortgage rates continue to weigh on affordability.

The report shows that the number of homes where a sale has been agreed has fallen by 7% compared with the same period last year. However, the picture varies significantly across the country, with northern England and Scotland proving more resilient than many southern regions.

Sales Activity Weakens Across Much of the UK

The biggest declines in agreed sales have been recorded in:

• Wales (-12%)

• East Midlands (-11%)

• East of England (-10%)

• South West (-10%)

• London (-9%)

• West Midlands (-8%)

By comparison, Scotland and the North West have seen much smaller falls of around 4%, helped by tighter housing supply and continued buyer demand.

Buyer enquiries have also cooled nationwide, falling by 15% year-on-year. The West Midlands has experienced the sharpest drop in demand, down 30%, followed closely by the North East, where enquiries have fallen by 29%.

Flats Continue to Struggle

While family homes remain relatively popular, the market for smaller flats continues to face challenges.

Zoopla found that two and three-bedroom houses are selling at a similar pace to last year, suggesting committed buyers are still moving despite higher borrowing costs.

However, more than two-thirds of one and two-bedroom flats listed for sale since January have yet to secure a buyer, making them the weakest-performing part of the market.

Higher Mortgage Rates Continue to Impact Buyers

Mortgage affordability remains one of the biggest obstacles facing prospective homeowners.

With average mortgage rates reaching around 5% during April, borrowers have typically faced an additional £125 per month on mortgage repayments compared with earlier borrowing costs—equivalent to around £1,500 more each year.

The impact varies considerably depending on location. First-time buyers in London have seen monthly mortgage costs increase by around £232, while buyers in the North East have experienced a much smaller increase of approximately £66 per month.

There is some encouraging news, however, as average mortgage rates eased slightly to around 4.8% during May. Industry experts believe further reductions will be needed to improve affordability and support a stronger housing market during the remainder of 2026.

House Price Growth Begins to Slow

The slowdown in buyer activity is also feeding through into house prices.

Annual UK house price growth has eased to 1.4%, with analysts expecting this figure to soften further over the coming months unless mortgage rates continue to fall and buyer confidence improves.

Regional differences remain significant:

• North East: +3.5%

• North West: +3.5%

• Scotland: +3.0%

• London: -0.2%

• South East: -0.3%

London has now recorded nine consecutive months of annual price declines, while sellers across southern England are increasingly being advised to price properties realistically in order to attract buyers.

Experts Say Local Markets Tell Different Stories

Industry experts stress that there is no single UK housing market.

Richard Donnell, Executive Director at Zoopla, said higher mortgage rates and political uncertainty have reduced buyer confidence, although the market remains more stable than during the disruption following the 2022 mini-Budget. He noted that buyers remain active in many northern markets, while conditions are more favourable to purchasers across much of southern England.

Propertymark Chief Executive Nathan Emerson said people continue to move home because of major life events such as changing jobs, expanding families and retirement, even during periods of economic uncertainty. He added that buyers are taking more time before committing and carrying out greater levels of research, making realistic pricing and expert local advice increasingly important.

Former RICS Residential Chairman Jeremy Leaf also pointed to growing economic uncertainty and an increase in available housing stock as factors slowing the market. While transactions are taking longer to complete, he said most agreed sales are still progressing, albeit at a slower pace than in previous years.

What It Means for Buyers and Sellers

For buyers, improving mortgage rates may begin to create opportunities if borrowing costs continue to ease during the second half of the year.

For sellers, particularly in southern England, accurate pricing and realistic expectations are becoming increasingly important. In stronger regional markets such as northern England and Scotland, demand remains relatively healthy, although homes are generally taking longer to sell than in previous years.

As market conditions continue to differ widely between regions, local knowledge remains one of the most valuable tools for both buyers and sellers navigating today's housing market.