Property market stays strong amid mortgage rate rises
The latest developments in borrowing costs have undoubtedly introduced a new layer of caution into the UK housing market. However, while headlines may suggest uncertainty, the reality on the ground tells a more balanced story—one of resilience, adaptation, and continued opportunity.
Recent figures from Connells Group highlight a notable shift in mortgage trends, with rising rates beginning to test buyer confidence. Yet, importantly, activity levels remain far more stable than many had anticipated.
📊 A Sharp Shift in Mortgage Rates
March saw a significant change in the cost of borrowing. Around 83% of home movers agreed mortgage rates above 4%, a considerable jump from 58% in February. This represents the most dramatic month-on-month increase since the turbulence that followed the UK mini-Budget of September 2022.
At the same time, the average mortgage rate for new property purchases climbed to 4.57%, marking its highest point since April of the previous year.
From an estate agency perspective, it’s not simply the level of rates that matters—it’s the speed of change. Sudden increases can create hesitation, as buyers and sellers alike take time to reassess their positions.
🏡 Buyer Activity: Steady Despite the Headlines
Despite the rise in borrowing costs, the market has shown impressive resilience.
Sales agreed across Great Britain were down by just 2% year-on-year in March. This relatively modest dip suggests that many buyers have continued to move forward—particularly those who secured mortgage deals earlier, before rates increased.
In practical terms, this means:
- The pipeline of transactions remains active
- Committed buyers are still proceeding
- The market has not stalled, but rather adjusted
As Aneisha Beveridge of Connells Group noted, it was the pace of change, rather than the rate level itself, that unsettled the market.
👥 First-Time Buyers Lead the Way
One of the most encouraging trends is the continued strength of first-time buyers.
In March, they accounted for 34% of all property purchases—the highest proportion recorded for this time of year since 2006. This highlights a key point: demand for homeownership remains strong, even in a higher-rate environment.
Interestingly:
- First-time buyers experienced smaller increases in mortgage rates
- They remained highly motivated to secure homes despite affordability pressures
- Many are adapting expectations rather than exiting the market
Meanwhile, existing homeowners—particularly those trading up—have felt the impact more acutely, as borrowing costs on lower loan-to-value products have risen more sharply.
📉 Demand Trends Across the UK
While overall demand remains robust, there are clear regional variations emerging.
Applicant registrations fell by 4% year-on-year in March, reversing a slight increase seen in February. However, when compared to pre-pandemic levels, demand is still significantly elevated—17% higher than in March 2019.
Regionally:
- Scotland and London saw increases in demand
- Parts of the North and Midlands experienced more noticeable slowdowns
- The South East England recorded the largest drop in agreed sales, down 12% year-on-year
This reflects the growing importance of affordability, with higher-value areas and stretched buyers feeling the pressure more intensely.
🏘️ Sellers: A More Cautious Approach
On the supply side, sellers are beginning to respond to the shifting landscape.
The number of new properties coming to market fell by 7% year-on-year in March, marking the sharpest decline in nearly a year. This suggests that some homeowners are choosing to wait rather than test the market in uncertain conditions.
For sellers currently active, this creates an interesting dynamic:
- Less competition from new listings
- A stronger focus on serious, proceedable buyers
- Greater importance placed on realistic pricing strategies
💷 House Prices: Holding Firm
Despite rising mortgage costs, pricing has remained surprisingly resilient.
Only 16.8% of homes in England and Wales sold below their final asking price in March—the lowest proportion since September 2025. On average, properties achieved just 1.5% below asking price.
This indicates:
- Limited downward pressure on property values
- Continued alignment between buyer and seller expectations
- A market adjusting, rather than declining
From an estate agent’s viewpoint, this reinforces the importance of accurate valuations. Correctly priced homes are still attracting strong interest and achieving competitive offers.
⏳ The Hidden Support: Earlier Mortgage Deals
A key factor underpinning current market stability is the volume of transactions backed by earlier mortgage approvals.
- Around 44% of completions in March were based on deals agreed in January or February
- Nearly half of buyers secured their mortgage rates during 2025, when borrowing was cheaper
This has effectively cushioned the market against the immediate impact of rising rates.
However, as these earlier deals begin to work their way through the system, we may see a more noticeable shift in activity levels.
📍 Final Thoughts
Rising mortgage rates are undoubtedly shaping the current landscape, but they are not stopping the market—they are simply refining it.
- For buyers, this may be a window of opportunity to act with less competition.
- For sellers, it’s a time to be strategic, well-advised, and market-aware.
As always, success in property comes down to timing, preparation, and expert guidance.
So if you are still unsure about what is the perfect