Whenever you think about moving home, there will always be winners in either the selling or buying markets. If the economy is doing well, the demand for properties usually reflects that optimism making it a sellers' market as more buyers chase a finite pot of available housing; when it's not doing well, buyers tend to become more conservative and focus on expenditure, making it a buyers' market, as sellers reduce their asking price for a definite and quick sale.
The UK is currently feeling the effects of the geopolitical impacts on fuel costs, transportation and the knock-on cost to everyday items such as food, while the scorching summer heatwaves have made farming harvests far more difficult, which, in turn, means higher food prices and lower disposable income available for potential property buyers to find the money for the necessary deposit.
Mortgage rates at a three-year high
The financial markets have also responded to these impacts, which has seen the highest mortgage rates for a number of years, which are off-putting to uncertain buyers who have then abandoned their thoughts of buying their next home for the time being.
This has been underlined by research from online property portal Zoopla, which shows that the average mortgage rate has risen to 5.2%. This is the highest point for three years, which typically adds a further £150 to the monthly mortgage repayments (or £1,800 each year).
More homes for sale, fewer sales agreed
Zoopla has shown that the number of properties that are up for sale has risen by 5% year-on-year, while at the same time sales agreed have fallen by 9%. There is a regional difference, too, with the West Midlands and the East of England seeing the steepest drops in sales agreed, while price growth has stalled across most of southern England.
The figures for new listings also show that a quarter of those homes have been put on the market before but have not previously sold, with the most affected categories being primarily flats and larger homes, which are generally slower to sell. Of these, around 60% are relisted at a lower price than before.
Flat prices keep falling while houses hold up
On that subject, prices for flats have fallen for 15 consecutive months, while the average price for houses has increased between 2% and 2.5% annually. The average growth across all property types is currently sitting at just 0.8%.
Zoopla expects the increase in average house prices to slow further to 0.5% by the end of 2026, with the number of property sales dropping by 100,000 compared with 2025.
Year-on-year price change for flats and houses to August 2026
Region | Houses | Flats |
Northern Ireland | 6.7% | 0.8% |
North-West | 3.6% | -0.6% |
Scotland | 3.3% | 2.1% |
North-East | 2.4% | 1.9% |
Wales | 2.3% | -2.4% |
West Midlands | 2.0% | -1.1% |
Yorkshire and The Humber | 1.6% | -0.9% |
East Midlands | 1.1% | -2.9% |
London | 0.8% | -2.6% |
East of England | 0.0% | -1.5% |
South-West | -0.2% | -1.7% |
South-East | -0.3% | -2.0% |
UK | 1.3% | -1.3% |
Source: Zoopla House Price Index
What Zoopla says
As Richard Donnell, Executive Director at Zoopla, commented on the research findings:
"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 million 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.
Getting the right price from the outset is essential.
If you are selling an affordable two or three bed home in the North of England it is a strong market.
The most challenging pricing decisions face sellers of flats and larger houses across southern England."
What this means if you're selling
If you are keen to sell your property, you should make sure the asking price is reasonable and attractive to prospective buyers, and that it matches the prevailing market rather than pitching it too high in the hope of getting more money for the sale, only to be disappointed.
What this means if you're buying
It would be very easy to assume that the market will continue on its current trend and wait until a particular property becomes even cheaper, but the international and domestic economy is largely unpredictable. So you'll need to understand what you would be willing to pay for a property, perhaps checking that price against similar properties in the area that have sold. And make sure your finances can support whatever decision you make before you make an offer.
However (and wherever) you are approaching your property project, and especially in these economically strained times, you'll need effective and focused representation to make sure the legal side of things is handled as quickly and efficiently as possible, with the experience and knowledge brought to the transaction protecting you.
Get your move moving
Our conveyancers at Homeward Legal will start work on your plans as soon as you agree to the quotation and appoint them to represent you.
Call us on 0800 022 4427 to discuss your move, or get a conveyancing quick quote online.