War in Middle East is putting Britons off moving home as buyer demand drops

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War across the Middle East is dampening demand among buyers in Britain's housing market, according to Zoopla.

Buyer demand in March came in 13 per cent lower than at the same point a year ago, as those in the early stages of house moves adopt a 'wait and see' approach, the property website said. 

Zoopla has warned that if mortgage rates keep rising, weaker demand among buyers looks set to 'feed into lower sales later this year.' 

The average two-year fix has risen from 4.83 per cent at the start of March to 5.77 per cent today, according to Moneyfacts.  

Lenders have been scrambling to hike mortgage rates and withdraw some products amid changing interest rate expectations in the financial markets.

Most major lenders have now increased rates multiple times since the conflict began. 

Overall, UK house price inflation is holding steady, with prices going up by 1.3 per cent year-on-year. Price growth was strongest in more affordable areas, with the north west of England recording an annual increase of 3.5 per cent.

Richard Donnell, executive director at Zoopla, said: 'The market remains active, but is 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.'

Higher mortgage rates: Most major lenders have now increased rates multiple times since the conflict began, which is putting off some buyers from moving home

The property portal said buyer demand had been running below last year's levels for the first three months of the year. 

Buyer enquiries have decreased by between 7 per cent and 19 per cent year-on-year, with the largest decline in active buyers recorded in the North East and West Midlands.

Zoopla said agreed sales have slipped by 2 per cent annually, with the market being propped up by 'committed movers' who already have mortgages agreed.

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The overall number of homes for sale has increased by 6 per cent annually, reflecting a continued desire among homeowners to move despite the more uncertain backdrop.

Zoopla said a significant proportion of transactions were 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.

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.

 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 22 March compared with a year earlier. Its house price figures cover the period up to the end of February.

Looking ahead, Zoopla said: 'Zoopla does not expect house price growth to slow in the near term, although this depends on demand remaining stable in the coming months. 

'A pricing impact would require a more sustained decline in buyer activity and sales volumes meaning current growth rates are set to continue.'