House price growth hits two-year low after summer slump
Homebuyers are becoming more cautious on pricing amid higher borrowing costs, says Zoopla’s Richard Donnell.
House price growth has slowed over the summer as high mortgage rates weigh on activity, Zoopla has revealed.
The latest Zoopla House Price Index suggests the higher cost of buying has contributed to a 9% fall in the number of sales being agreed during September versus last year.
Annual house price growth has also slowed to 0.8% at £273,000, down from 1.7% a year ago and the lowest level for more than two years since July 2024, Zoopla said.
House prices are rising fastest in Northern Ireland by 6.7% followed by the North West, up 3.6% annually, followed by Scotland at 3% and the North East at 2.4%. Growth in house values has stalled across much of southern England where property values are higher and more sensitive to higher borrowing costs, the portal warns.
Buyers are simply more cautious and selective about what they view and offer.”
The market is also moving at different speeds depending on the region.
Around three-quarters of homes listed in Scotland find a buyer within three months, compared with approximately half in northern England and just three in ten in London.
These differences also extend to property types. More affordable two and three-bedroom houses generally attract stronger demand, while flats and larger family homes face more challenging conditions in many areas, particularly southern England, Zoopla said.
Re-listings rise
The Index also shows that a quarter of newly listed homes listed for sale this month have previously been on the market in the past year, while six in ten are returning at a lower asking price.
These re-listings are most common among flats and larger houses, which are generally taking longer to find buyers. In London, a third of flats coming onto the market have been listed before, compared with fewer than one in ten in Scotland.
The number of homes for sale is 5% higher than a year ago, the Index shows.
Richard Donnell (pictured), Executive Director at Zoopla, says: “The Middle East conflict has pushed up energy prices and mortgage rates, tempering the autumn rebound in housing activity. Borrowing costs are likely to remain elevated, with house price inflation drifting towards 0.5 per cent by year-end and annual sales expected to be closer to 1.1 million versus 1.2 last year.
“While key measures of housing market activity are lower than last year, there is still plenty of demand for homes. Buyers are simply more cautious and selective about what they view and offer. Sellers who factor in local market conditions and seek detailed advice from their local estate agents on how to set the asking price, can still find a buyer relatively quickly.”
