Housing market holds firm as value buyers drive sales, inquiries down 13% – Property Industry Eye

The UK housing market is maintaining a steady sales performance despite uncertainty over events in the Middle East, Zoopla’s latest House Price Index shows. The higher mortgage rates associated with these conflicts affect consumer demand.

As transactions continue, the market is increasingly dependent on a small group of willing buyers, as some families are slow to move. This widens the gap between weak overall demand and the relatively stable levels of agreed sales.

Table 1: Differences between questions agreed upon with home buyers

Zoopla’s data shows that consumer demand was lower than last year’s levels during the first three months of 2026. In March, inquiries were 13% lower than a year earlier, reflecting the impact of events in the Middle East and a more cautious approach to “wait and see” among potential buyers. Average mortgage rates rose 0.4 percent last month, and several sub-4% deals were withdrawn as markets and consumers adjusted to uncertainty about inflation.

Despite weak demand, agreed sales have remained stable, falling only 2% year-on-year. This is driven by customers with credit cards or a clear need to move, who continue to support transactional conditions.

Fewer customers, but more persuasive than sales supporters

This gap between consumer demand and agreed upon sales is evident across the country. Customer inquiries have decreased by between 7% and 19% year-on-year, with the biggest decline in active customers reported in the North East and West Midlands, although inquiries were down compared to last year.

Table 2: Differences between sales and customer agreed questions across countries

Meanwhile, agreed sales are continuing steadily, with a more moderate decline in the northern parts of England, again from a higher position. Contrary to consumer demand, agreed sales are flat or slightly higher in some areas – such as Wales, Yorkshire and the Humber and London compared to last year.

At the same time, the overall number of homes for sale increased by 6% year-on-year, reflecting the continued desire among homeowners to move despite the uncertain conditions.

A large proportion of transactions are also indifferent to rising mortgage rates. About a quarter of sales are cash purchases, with many homeowners having built up equity and pre-financing, reducing the impact of higher mortgage rates. This helps to support sales in the short term, but also highlights the growing confidence of customers who are not concerned about the credit rating.

House price growth remains stable

Overall, the UK house price has remained stable at +1.3% annually, with little immediate impact from the recent decline in consumer demand. Pricing trends remain uneven across the country. The strongest growth in the cheapest areas, with the North West recording an annual growth of 3.5%, although the price drop across the south of England has slowed in recent months despite the reduction in demand.

Zoopla does not expect house price growth to slow down in the future, although this is based on stable demand in the coming months. The price impact may require a more sustained decline in consumer activity and retail prices which means that the current growth rate will continue.

Table 3: House price growth %yoy – February 2026

Richard Donnell, managing director of Zoopla, said: “The market is working, but it continues to rely heavily on a small pool of people looking to buy homes.”

“If credit rates are stable at current levels we expect sales activity to continue to improve compared to last year. A further increase in borrowing costs could weaken demand and affect sales later in the year.

“For buyers, there is less competition and more choice, but the price is increasing. For sellers, houses are still being sold, but buyers are more selective and do not think about the price.