Home buyer demand weakened in March as rising mortgage rates and global uncertainty linked to the Middle East conflict dampened confidence, according to a property website.
Zoopla said that agreed sales have fallen by 2% annually, with the market being supported by committed movers who already have mortgages agreed.
But sales agreed are flat or slightly higher in some parts of the UK, such as Wales, Yorkshire and the Humber and London, compared with last year, it said.
Buyer inquiries were 13% lower than a year ago as potential buyers adopt a more cautious, “wait and see” approach, Zoopla’s report said.
It said that buyer demand has been running below last year’s levels across the first three months of the year.
The overall number of homes for sale has increased by 6% annually, reflecting a continued desire among homeowners to move despite the more uncertain backdrop.
Zoopla said a significant proportion of transactions are also less sensitive to rising mortgage rates.
Around a quarter of sales are cash purchases, while many existing homeowners have built up equity and secured borrowing in advance, reducing the impact of higher mortgage rates.
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This is helping to support sales in the short term, but also highlights growing reliance on less mortgage rate-sensitive home buyers, the report said.
Overall, UK house price inflation is holding steady, with 1.3% annual growth.
Price growth is strongest in more affordable areas, with the north west of England recording an annual increase of 3.5%, Zoopla said.
Lenders have been scrambling to hike mortgage rates and withdraw some products amid changing expectations in the financial markets.
Swap rates, which are used by lenders to price mortgages, have been rising.
Richard Donnell, executive director at Zoopla, said: “The market remains active, but becoming increasingly reliant on a smaller pool of serious buyers.
“Some early stage buyers are adopting a wait and see approach but there is a sizable group of committed buyers who are pressing ahead with housing purchases.”
Zoopla’s house price index measures the change in house prices where sales are agreed.
Data on sales agreed and buyer demand covers the four weeks to March 22 compared with a year earlier. Its house price figures cover the period up to the end of February.
Here are annual house price changes, according to Zoopla:
London, minus 0.2%
South East, minus 0.2%
South West, 0.0%
Eastern England, 0.6%
East Midlands, 1.2%
West Midlands, 1.9%
Wales, 2.1%
Yorkshire and the Humber, 2.2%
Scotland, 2.6%
North East, 2.8%
North West, 3.5%
Northern Ireland, 7.2%
