The mortgage crisis has depressed demand for properties for sale by 18% across the UK and 41% for three and four-bedroom houses in particular, new figures show.

Zoopla says escalating mortgage interest rates over the past two months, during which the base rate has increased from 4.5% to 5%, have begun to reduce asking prices for homes for sale over £300,000 more than cheaper homes.

But the portal also says it expects mortgage rates to settle down to 4-5% this Autumn, limiting the long-term damage to the market.

Nevertheless, the biggest impact on the housing market for sales has been in southern England, the portal says, a trend which will continue during the second half of this year.

It is also predicted that this year house prices on average across the UK will be 5% lower than predicted.

To give a flavour of the slowdown under way, price growth currently stands at 0.6% compared to 9.6% a year ago.

Richard Donnell, Executive Director at Zoopla says: “Higher mortgage rates have hit home buyer demand once again after a sustained improvement over the Spring as mortgage rates fell to 4%”.

Matt Thompson, Head of Sales at London agency Chestertons, says: “Although there still is a vast number of buyers wanting to move as soon as possible, rising interest rates have forced others to be more cautious, review their financial situation and calculate a more conservative budget.

“Whilst this resulted in fewer new buyers entering the market last month, we expect activity to pick up again once buyers have adjusted their criteria and lenders are bringing more products to the market again.”