Zoopla data points to September as the key window for sellers willing to price competitively
House price growth has slipped to 1.3%, down from 1.7% a year ago, as sales agreed run 9% below last year's levels, according to Zoopla's latest House Price Index.
The property portal attributes the sharper-than-usual summer slowdown primarily to elevated mortgage rates and political uncertainty.
The average UK home now stands at £272,800, having gained £3,400 over the past 12 months. Regional performance diverges considerably: a typical home in Northern Ireland has gained £9,610 in the past year, and £7,100 in the North West, while London homes have lost £3,270 and South East properties are down £1,480.
In percentage terms, the North West recorded growth of 3.5%, up from 3.2%, and the North East rose from 2.6% to 3.1%. London, however, moved from modest growth of 0.7% to a decline of 0.6%, with the South East following a similar trajectory, falling from 0.7% to -0.3%.
Average mortgage rates fell from a peak of close to 5% in April to approximately 4.65% in June before edging back up to around 4.75% in July, as tensions in the Middle East resurfaced.
Since January, rate rises have added roughly £125 per month — or £1,500 per year — to repayments on a typical UK home. Zoopla identifies this additional cost as a primary driver of the faster-than-usual decline in sales agreed over the summer.
Despite slower activity across most regions, the North East is registering sales up approximately 4% on last year. Zoopla attributes this to lower average house prices in the region, which mean that the same rise in mortgage rates translates into a smaller cash increase for buyers compared with elsewhere in the country.
Nearly three-quarters of local markets (76%) recorded fewer sales than a year ago over the past three months, with 24% holding steady or growing. Warrington, Hull and Dundee stand out as hotspots, with sustained sales growth and stronger price performance.
At the other end of the scale, Bath, Oxford and Harrow have seen fewer transactions and have moved from positive price growth 12 months ago to flat or negative territory. Harrow was previously flagged as a market under pressure in April; Zoopla notes that weakness has now fed through into prices.
Eight of the UK's 11 regions have seen the total number of homes for sale increase year-on-year, giving buyers greater negotiating power than they have had for some time.
Zoopla's data also indicates that September consistently marks the point at which the share of homes cutting their asking price by 5% or more peaks — and the same month in which sales activity typically recovers from its summer low. The property portal notes that almost a third (30%) of homes currently listed were placed on the market in the second quarter and remain unsold with no price reduction.
Any autumn recovery is contingent on mortgage rates remaining stable. A further rise, Zoopla cautions, would be likely to delay rather than support a recovery in buyer confidence.
"This summer has seen a sharper slowdown than usual, with higher mortgage rates and political uncertainty both weighing on buyer confidence," said Richard Donnell (pictured right), executive director at Zoopla. "But it's not all one-way traffic, sales are still getting done, house prices are still rising in most of the country, and buyers have more room to negotiate than they've had in some time.
"Conditions can vary sharply from place to place with almost three-quarters of local markets have seen sales fall over the past three months, but a quarter are bucking that trend entirely. Sellers should speak to a local agent who knows what's actually happening on their own patch, rather than relying on the national picture.
"For anyone who doesn't need to move, it's entirely reasonable to wait and see how things settle. But for those with a genuine need to sell, our data shows September is when the market typically turns, and pricing to meet buyers now is what tends to get deals done, rather than waiting to see what autumn brings."
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