UK housing market sees buyer caution as mortgage rates rise

A RICS survey shows new‑buyer enquiries falling to a net balance of -39% in March, the weakest reading since August 2023, while agreed sales slipped to -34%.

Mortgage rates remain high, with the two‑year fixed rate at 5.81% – up 98 basis points from early March – and the five‑year fixed at 5.7%.

Prospective buyers are split: first‑time and early‑stage buyers are adopting a “wait and see” approach, whereas committed buyers with mortgage finance in place continue to support sales. Zoopla data indicate overall buyer demand is about 13% below last year’s level, while sales are only modestly down 2%.

At the same time, property experts warn that unrealistic asking prices are leaving many homes on the market. Nearly half of properties listed in the past three years have failed to sell, with overpriced leasehold homes further constraining activity.

The slowdown is expected to shift some demand toward rentals in the short term, as fewer buyers enter the market and affordability pressures persist.