Property experts report that home buyers are becoming more cautious as mortgage rates increase, leading to a 2% decrease in UK property sales in August compared to the same period last year. With an estimated 95,220 sales in August 2026, down 1% from July, concerns over affordability and economic pressures are dampening market activity. To address this issue, the Government introduced a new initiative called Your First Home, offering first-time buyers access to equity loans with lower deposits, aiming to boost housing market activity.
Written locally by qwen2.5:14b on 2026-09-30,
using this article's own text rather than the other coverage of the
same event (that is the story summary below).
Story summary
In August 2025, 95,220 homes were sold across the UK, marking a 2% decrease from the same month in 2025 and a 1% drop compared to July 2026. This decline is attributed to rising mortgage rates, which have deterred many home buyers due to ongoing financial pressures. Property experts note that prospective buyers are being more cautious when assessing significant property decisions amid these economic uncertainties. To support first-time buyers, the Government introduced The Your First Home initiative, allowing them to purchase new-build properties with as little as a 2.5% deposit; the government will lend an additional 20%. Developers participating in this scheme must contribute financially to cover associated costs. Jason Tebb of OnTheMarket highlights that helping first-time buyers secure homes should stimulate activity within the broader real estate market.
Written for “Mortgage Rate Hikes Caution Buyers” on 2026-10-05,
grounded in this article and the 1 other(s) covering the same event.
Home buyers being more cautious amid mortgage rate hikes, property experts say
The number of homes sold in August dipped by 2% compared with the same month a year earlier, according to HM Revenue and Customs (HMRC) figures.
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number → say → figures
Across the UK, an estimated 95,220 sales took place in August, which was 2% lower than August 2025 and a 1% fall compared with July 2026.
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which → estimate → July
Some average fixed mortgage rates have edged up in recent weeks amid rises in swap rates, which lenders use to price mortgages.
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lenders → fix → mortgages
The Your First Home initiative was unveiled at the weekend and will give first-time buyers the chance to buy a new-build property with a 2.5% deposit, with the Government stepping in to lend them an extra 20% towards the cost.
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Government → unveil → cost
People will be able to access equity loans with an initial interest-free period.
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People → access → period
Developers will also be expected to make a contribution when signing up to the scheme, to help cover costs.
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Developers → expect → costs
Jason Tebb, president of OnTheMarket, said: “Raising a deposit continues to be an issue for first-time buyers, particularly those who can’t call upon the ‘bank of mum and dad’ for assistance, and supporting more first-time buyers should boost activity in the wider market.”
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supporting → say → market
Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “With transaction numbers slipping in August, affordability and wider concerns about the housing market and what the Budget might have in store appear to be dampening activity.
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Budget → say → activity
“Volatility in swap rates and ultimately mortgage pricing isn’t helping, but could well continue to be a feature of the autumn.
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Volatility → help → autumn
“We welcome the Government’s scheme to help first-time buyers as this should promote activity across the market.”
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this → welcome → market
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Nathan Emerson, chief executive officer at property professionals body Propertymark, said: “Many prospective buyers and sellers have been carefully assessing the wider economic outlook and, against a backdrop of continued financial pressures, have understandably adopted a more cautious approach to making significant property decisions.”
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buyers → read → decisions
Richard Donnell, executive director at Zoopla, said: “Housing sales are slowing in the face of higher mortgage rates adding to the cost of buying a home.
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rates → say → home
“The sales reported in this data were first agreed five to six months ago.”
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sales → report → data
Tom Bill, head of UK residential research at Knight Frank, said: “Given that mortgage offers can last for six months, activity will be squeezed in the final three months of the year as the impact of higher mortgage rates from the Middle East conflict takes its toll.
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impact → say → toll
“The medium-term outlook depends on how the unpredictable conflict unfolds, whether UK inflation signals get louder and what property-related measures Chancellor John Healey announces in next month’s Budget.”
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Healey → depend → Budget
Bank of England figures released on Tuesday showed 54,900 mortgages were approved for a house purchase in August, decreasing from 55,900 in July.
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mortgages → release → July
Nick Leeming, chairman of Jackson-Stops, said: “For sellers, the price at which a home comes to market matters.
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home → say → market
“An asking price grounded in recent local sales data can attract serious buyers and create competition, giving owners the best chance of realising the full value of their property.”
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price → ground → property
Iain McKenzie, chief executive officer of The Guild of Property Professionals, said: “As we move further into autumn, there are signs of renewed buyer engagement, but this is likely to be a more measured market than in previous years.
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this → say → years
“Buyers have plenty of choice and sellers need to recognise that competition is not simply between buyers, it is also between properties.
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it → have → properties
“Getting the asking price and positioning right from day one will be crucial to converting renewed interest into transactions.”
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price → get → transactions
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