House price growth slowed to 0.8% in the year to August, its lowest level since July 2024, as average mortgage rates climbed to 5.2%, according to Zoopla’s latest house price index.
Rates now sit at a three-year high, up from 4% at the start of the year. For the average buyer, that adds £150 a month, or £1,800 a year, to repayments, based on a five-year fixed rate at 75% loan-to-value over 27 years. Sales agreed have fallen 9% compared with a year ago, with every region and country of the UK recording a drop.
Buyers gain more choice
The gap between supply and demand is widening. Homes for sale are up 5% year on year, while sales agreed over the four weeks to 20 September dropped 9%. The imbalance is sharpest in London and southern England, where the number of homes for sale is 8% higher than last year. Sales agreed fell furthest in the West Midlands, down 15%, and the East of England, down 14%. Scotland proved more resilient, with sales agreed down 1% and homes for sale up 3%.
Relistings add to the choice. A quarter of homes newly listed in September had been on the market within the last year, and six in ten of those returned at a lower asking price. The rest came back at their previous price. Flats and larger houses account for most relistings, and these properties generally take longer to find buyers.
In London, for example, a third of flats coming to market have been listed before, compared with fewer than one in ten in Scotland.
House price growth splits between flats and houses
The average UK home costs £273,000. Annual house price growth of 0.8% compares with 1.7% a year ago and 0.9% last month. Flat prices have fallen for 15 months, since May 2025, while house prices still rise by around 2% to 2.5% a year, although that pace has eased as higher mortgage rates and fewer sales take effect. Some sellers now accept lower offers, and others list at more realistic asking prices to attract buyers.
Regional performance follows affordability. Among houses, Northern Ireland leads with growth of 6.7%, followed by the North West at 3.6%, Scotland at 3.3% and the North East at 2.4%. Growth has stalled across much of southern England, where higher values leave prices more sensitive to borrowing costs. London houses are up 0.8%, the East of England is flat, and the South West and South East are down 0.2% and 0.3% respectively.
Flat prices are falling in almost every region. Scotland (up 2.1%) and the North East (up 1.9%) are the notable exceptions, while London flats are down 2.6% and East Midlands flats are down 2.9%.
Local demand varies widely
Regional price trends show up in how quickly homes sell. Based on homes listed in the second quarter, about three-quarters of those in Scotland found a buyer within three months, compared with roughly half in northern England and three in ten in London.
More affordable two- and three-bedroom houses draw stronger demand, whereas flats and larger family homes face tougher conditions in many areas, particularly southern England. Cheaper markets generally see stronger sales and modest house price growth, while higher borrowing costs and greater buyer choice weigh on prices in more expensive ones.
“The Middle East conflict has pushed up energy prices and mortgage rates, tempering the autumn rebound in housing activity,” said Richard Donnell, executive director at Zoopla.
“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.”
