Homebuyer activity is showing signs of an autumn rebound despite higher mortgage rates cutting borrowing power by 9% since the start of the year, Zoopla’s latest house price index reveals.

The number of people searching for homes increased by 7% year-on-year over the past four weeks, with searches higher across every region and country for the first time since August 2025.

However, Zoopla calculated that the average mortgaged buyer would need to find an additional £18,200 for their deposit to maintain the same monthly mortgage payment they could have secured in January.

The figure rises to £35,500 in London, compared with £10,200 in the North East.

RATES SQUEEZE BUYING POWER

Zoopla said average 5-year fixed mortgage rates had increased from below 4% in January to around 4.8%.

A buyer previously able to afford a £200,000 mortgage while maintaining a particular monthly repayment could now borrow around £182,000 for the same payment – cutting their buying power by 9%.

First-time buyers are particularly exposed because they typically require larger loans and often borrow over longer terms.

Higher borrowing costs contributed to a quieter summer market, with agreed sales still 6% lower than a year ago. However, Zoopla said the gap was starting to narrow.

Property searches increased most strongly in the South East, up 8.9%, followed by the East of England at 8.5%. The North West recorded the smallest increase at 0.7%.

HOUSE PRICE GROWTH SLOWS

Buyers are returning to a market with greater choice, with the total stock of homes for sale 5% higher than a year ago.

Zoopla said this additional supply would help keep price growth in check and give buyers greater scope to negotiate.

Annual UK house price growth slowed to 0.9% in July from 1.3% a month earlier, taking the average price to £272,800.

Prices fell by 1% annually in London, 0.4% in the South West and 0.3% in the South East. In contrast, the North West recorded growth of 3.1%, while Northern Ireland led the UK at 5.4%.

“Average mortgage rates have stabilised.”

Richard Donnell (main picture, inset), executive director at Zoopla, said: “Many buyers have taken a ‘wait and see’ approach over the summer months in response to higher borrowing costs and political uncertainty.

“Since then we have seen a steady increase in the number of people searching for a home, assessing their options ahead of the post-holiday rebound in sales market activity.

“Average mortgage rates have stabilised but remain closer to 5% than 4%, meaning affordability remains an important factor for many home buyers choosing their next home.”

ENGAGED BUYERS

Nathan Emerson, CEO at Propertymark, said: “These figures suggest buyers are beginning to re-engage with the housing market after a quieter summer, with searches up across every region. But renewed interest should not be mistaken for a full recovery in transactions just yet.

“Affordability remains the key constraint. Higher mortgage rates are reducing buying power, while the additional £18,200 deposit needed to maintain repayments highlights the particular challenge facing first-time buyers.

“More homes available for sale is positive, giving buyers greater choice and helping keep price growth in check. But the regional picture remains mixed, reinforcing that the housing market is not one-size-fits-all.

“Local expertise will be crucial this autumn, helping buyers understand what they can realistically afford and ensuring sellers price their homes appropriately. The return of demand is encouraging, but affordability remains the biggest barrier to a sustainable recovery.”