Three in five homes listed for sale since January remain on the market, according to property portal Zoopla, as high mortgage rates frustrate potential buyers.
A lack of demand from buyers, as well as some high asking prices from sellers, have left homes in some areas unsold.
Agreed sales were 7% below last year, Zoopla said, but the picture varied across the country with sales down 12% in Wales and 11% in the East Midlands.
First-time buyers were most exposed to high mortgage rates, although there are now signs of greater competition among lenders who are lowering rates.
A jump in mortgage rates in April – prompted by financial upheaval caused by the US-Israeli war with Iran – added an average of £125 a month to a typical mortgage at its peak compared with January.
In London, the peak saw £232 a month added to the average first-time buyer’s costs.
The average two-year fixed rate jumped from 4.83% at the start of March to a peak of 5.90% on 12 April, according to the financial information service Moneyfacts. It has since dropped to 5.54%.
The increase was a major factor in pushing down demand from buyers in the UK by 15% compared with a year earlier, according to Zoopla’s report which considers the market to the end of May.
However, in the north east of England mortgage costs for first-time buyers were only £66 a month higher over the same period.
“The national picture can only tell you so much,” said Richard Donnell, executive director at Zoopla.
“For sellers still waiting for an offer, the conversation to have is about price. Correctly priced homes are selling, while overpriced homes are sitting.”
However, he pointed out that recent cuts in mortgage rates were a positive for buyers.
“For buyers, rates are falling, there is more choice of homes for sale than a year ago and motivated sellers are willing to negotiate. If you are ready to move, conditions are more favourable than they were three months ago,” he said.