Housing Market Holds Firm as Serious Buyers Drive Sales, Enquiries Fall 13%

Why It Matters

The divergence between falling demand and steady sales highlights a tightening buyer pool, signalling potential volatility if borrowing costs rise. Stakeholders must monitor mortgage rate trends to gauge future transaction volumes.

Key Takeaways

• Buyer enquiries down 13% YoY in March 2026
• Sales agreed fell only 2% YoY, staying stable
• Cash purchases represent about 25% of transactions
• Home listings up 6% YoY, increasing supply
• House price inflation steady at 1.3% YoY

Pulse Analysis

The UK housing market’s current equilibrium reflects a classic supply‑demand mismatch, where a shrinking pool of motivated buyers offsets broader consumer caution. Mortgage rates have edged up by roughly 0.4 percentage points, prompting many first‑time purchasers to adopt a wait‑and‑see stance. Yet, owners with pre‑approved financing or cash reserves continue to drive transactions, cushioning the market against a sharper decline. This dynamic underscores the growing importance of equity‑rich sellers and cash buyers, who are less sensitive to rate fluctuations and can sustain activity when credit conditions tighten.

Regional disparities further nuance the outlook. While northern England sees modest sales declines, areas such as Wales, Yorkshire and London report flat or slightly higher agreed sales, suggesting localized resilience. Simultaneously, the 6% year‑on‑year rise in homes for sale expands inventory, offering buyers more choice but also pressuring sellers to price realistically. The rise in cash‑funded purchases—about a quarter of all deals—mitigates the impact of higher borrowing costs, but also signals a market increasingly dependent on financially robust participants.

Looking ahead, house‑price inflation is projected to hold at around 1.3% annually, provided buyer activity does not erode further. Analysts caution that a sustained dip in enquiries combined with any additional mortgage‑rate hikes could tip the balance, leading to slower price growth or even corrections in overheated regions. For investors and policymakers, the key metric to watch will be the trajectory of mortgage rates and the proportion of cash versus financed purchases, as these will dictate whether the market can maintain its current steadiness or face renewed pressure.