Mortgage approvals hit an 18-month low. Should first-time buyers wait or move?

Buyer demand has fallen 15% in a year. Three in five homes listed since January still have no buyer. The property market is slowing, and that reshapes the maths for first-time buyers.

Sales agreed over the past four weeks are down 7% on last year, Zoopla's June House Price Index shows. Higher mortgage rates and political uncertainty are pushing households to wait.

Mortgage rates hit 5% in April before edging down to 4.8% in May, Bank of England figures show. That added around £125 a month to the average mortgage — about £1,500 a year.

For first-time buyers, the hit depends heavily on location. London first-time buyers face an extra £232 a month. In the North East, the increase is £66.

Flats are the slowest sellers. More than two-thirds of one- and two-bedroom flats listed this year remain unsold, Zoopla found. Two- and three-bedroom houses are still moving at last year's pace.

There is a silver lining for buyers. More homes are on the market than a year ago. Sellers are keener to negotiate. And rates have started to fall.

"It's a buyer's market across much of the South right now," said Richard Donnell, executive director at Zoopla. "Correctly priced homes are selling, while overpriced homes are sitting."

Bank of England data paints a gloomier forward picture. Mortgage approvals for house purchase fell to 56,200 in May — the lowest since December 2023 and well below the six-month average of 63,300. Remortgage approvals dropped sharply, from 51,200 to 33,300.

HMRC's May figures show completed transactions actually rose 17% on a year earlier, to 98,450. But that flatters the market. The comparison is against a weak May 2025, when buyers had rushed purchases forward to beat stamp duty changes.

Net mortgage borrowing fell to £2.9bn in May — the lowest since May 2025.

House price growth has slowed to 1.4% nationally. Zoopla expects that to ease to 1% in the second half of the year.

For first-time buyers weighing a move, the picture is mixed. Borrowing costs are higher than a year ago. But the choice is wider, sellers are flexible, and rates are drifting down.

"If you are ready to move, conditions are more favourable than they were three months ago," The Zoopla Director said.

As seen on LinkedIn, Twitter/X, FaceBook and Reddit