Home buyers have been returning to the housing market in growing numbers over the last four weeks, says Zoopla.
This follows the seasonal slowdown in activity over the summer.
But there’s a sting in the tail because there’s now 9% reduction in what households can borrow compared to the start of the year.
Mortgage rates peaked at close to 5% in April and this has led to more home buyers waiting on the sidelines over the summer months.
Sales agreed are still down by 6% versus last year but the gap to last year is starting to close.
Buyers can’t wait on the sidelines indefinitely and stability in mortgage rates means people are starting to search for homes again (+7% YoY).
Average five-year fixed mortgage rates have risen from below 4% in January to around 4.8% today.
For a buyer who could previously afford a £200,000 mortgage while keeping their monthly repayment unchanged, that rate rise means they can now only borrow around £182,000 for the same monthly payment – a 9% reduction in how much they can borrow (or ‘buying power’).
In the face of reduced buying power, home buyers can choose to: wait for rates to move lower, look to buy cheaper homes, accept paying more on their mortgage repayments or put down a larger deposit to reduce the impact.
The portal says there is no evidence of buyers scaling back on requirements and many have decided to wait over the summer with fewer sales agreed compared to last year.
The average home buyer would need to add an additional £18,200 to their deposit on a home purchase to keep the monthly mortgage repayments unchanged compared to the start of the year.
This varies between regions, reflecting the variation in house prices – buyers in London would need to add almost double the national average to their deposit (£35,500) while lower house prices mean those in the North East would only need an additional £10,200.
The impact of higher mortgage rates on buying power is greater on first time buyers who often take longer mortgage terms and larger loans compared to existing homeowners.
Despite reduced buying power, mortgage rates have stabilised and there has been a clear and sustained increase in the number of people searching for homes on Zoopla which is up 7% year-on-year – the highest increase since mortgage rates jumped in the spring.
Importantly, searching for homes is higher across every region and country for the first time in a year (since August 2025).
The pick up in searching activity is strongest in the South East (+8.9%) and East of England (+8.5%), while the North West (+0.7%) has seen the lowest increase.
An increase in searches shows prospective home buyers starting their home buying journey and assessing the choice of homes and how pricing has changed over the summer.
Late August and early September tend to see an increase in asking price reductions as sellers adjust pricing to attract buyers over the autumn.
Richard Donnell, Executive Director at Zoopla, says:“Many buyers have taken a ‘wait and see’ approach over the summer months in response to higher borrowing costs and political uncertainty.
“The low point for activity was mid July around the time of the World Cup final. 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.
“This is a nationwide trend and the first time searches for homes are up across Britain this year.
“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.
“Buyers have plenty of choice this autumn and will be able to make competitive bids for homes. Motivated sellers need to price carefully to attract interest and bids and seek the advice of local agents for the likely levels of demand and interest in their home as market conditions vary widely across the country.”
