Estate agents see 27% drop off in first-time buyer enquiries as interest rates rise

Updated: 19:01 EST, 12 November 2026 First-time buyers have put moving plans on hold in the wake of the Bank of England's decision to raise the base rate to 4 per cent last week.There were 27 per cent fewer estate agent enquiries for homes from first-time buyers in the last week compared to the same period last year, according to Zoopla.The property website says buyer enquiries are slowing across all types of properties from flats to country houses.It also says the number of sales being agreed is tracking 10.5 per cent lower than last year. Fewer sales also means the number of homes available to buy is growing as more stock remains unsold on the market.Zoopla says the number of homes for sale is up by 9 per cent compared to this time last year. In particular, the number of two-bedroom houses for sale has increased 14 per cent year-on-year, while the number of homes priced below £200,000 is up 13 per cent – many of these will be flats.This means there are more sellers trying to compete for fewer buyers meaning prices more often than not have to fall for people to sell. Put off: Zoopla revealed that first-time buyer enquires have fallen 27 per cent year on year in the wake of the Bank of England's decision to increase interest rates to 4 per cent'First time buyers are the engine of the housing market accounting for four in 10 sales last year,' said Richard Donnell, executive director at Zoopla.'Higher mortgage rates have reduced the buying power of all buyers by an average of 15 per cent compared to the start of the year. 'Higher mortgage rates over the year have reflected expectations of further increases in the base rate, with the Bank of England decision last week making more buyers pause and wait.'The good news for those ready to move is that there are more homes to choose from, particularly at the more affordable end of the market. Sellers need to recognise that buyers have more choice and pricing realistically is increasingly important.'Zoopla's findings chime with the latest survey from The Royal Institution of Chartered Surveyors (Rics).Its surveyor and estate agent members also warn housing demand is either 'falling or stagnant' with fewer buyers contacting estate agents and fewer sales being agreed.Looking ahead towards the next 12 months, the outlook from Rics members about future property sales is the most pessimistic it's been since July 2023. Too many homes for sale in southern England The gap between supply and sales is particularly pronounced in southern England, according to Zoopla. The South East has the widest gap, with homes for sale up 12 per cent and sales agreed down 16 per cent year-on-year. It says house prices have fallen 0.6 per cent over the same period.In the East of England, the number of homes on the market is up 17 per cent, while sales agreed are down 8 per cent and house prices have fallen 0.5 per cent. The South West is experiencing similar conditions, with homes for sale up 12 per cent and house prices down 0.4 per cent.Tom Bill, head of residential research at Knight Frank says higher borrowing costs mean that many people have delayed moving this year across London and the south of England.'First-time buyers are particularly affected because of the need for a deposit and the increased mortgage rates that are associated with higher loan-to-value ratios,' says Bill.'Events in Washington rather than Westminster are shaping the outlook for the UK housing market. 'A lasting diplomatic solution in the Middle East would lower energy prices and inflation expectations and that would be of greater benefit to first time buyers than anything announced in the Budget.'The picture is different in northern England, according to Zoopla where the number of homes for sale remains broadly unchanged and house prices continue to rise as the impact of higher mortgage rates has a lower cash cost than in southern England. Annual price growth stands at 3.2 per cent in the North West and 2.4 per cent in the North East, although sales agreed remain below last year's levels. How to find a new mortgage Mortgage rates have jumped as conflict with Iran has driven up inflation expectations and dashed hopes of interest rate cuts.If you need a mortgage because you are buying a home, or your current fixed rate deal is due to end, you should explore your options as soon as possible. This is Money has a long-standing partnership with fee-free broker L&C, to provide you with expert mortgage advice.Use This is Money and L&Cs best mortgage rates calculator to show deals matching your home value, mortgage size, term and fixed rate needs.Or use L&C’s online Mortgage Finder to search thousands of deals from more than 90 different lenders to discover the best deal for you.Mortgage service provided by London & Country Mortgages (L&C), which is authorised and regulated by the Financial Conduct Authority (registered number: 143002). The FCA does not regulate most Buy to Let mortgages. Your home or property may be repossessed if you do not keep up repayments on your mortgage