More than a third of UK homes are now in postcode areas where house prices are falling, according to Zoopla's latest House Price Index. The portal found that 35% of homes are in areas recording annual price declines, compared with just 12% a year ago.
Overall, prices are falling in 37 of the 119 postcode areas Zoopla monitors. Sales agreed over the past four weeks have fallen 7% year-on-year, while the number of homes for sale has increased 7%, giving buyers more choice and more room to negotiate.
Southern England bears the brunt
Southern England faces the greatest pressure, with 85% of homes in London and the South East in postcode areas recording price declines. In London, average prices have fallen 1% over the past year to £523,100, a drop of £5,400. The South East has recorded a 0.6% decline, while prices in the Eastern region have fallen 0.5%.
Some local markets have seen sharper falls. Prices have dropped 5.7% in the WC London postcode area and 2.2% in North West London. Truro has recorded a 2.2% decline, while Bournemouth and Torquay have both seen falls of 1.7%.
In contrast, prices continue to rise across more affordable regions. Average prices in the North West have risen 3.2%, adding £6,600 to property values over the past year. Northern Ireland recorded the strongest regional growth at 5.8%, followed by Scotland with annual growth of 2.5%.
Overpriced homes struggle to attract buyers
Despite weaker sales activity, homes that secure a buyer are taking an average of 44 days to sell, matching last year's pace. Zoopla's analysis suggests initial asking prices are becoming increasingly important.
Of homes listed between April and June 2026, 41% of those priced at least 5% below their estimated value found buyers within 90 days. By comparison, just 26% of homes marketed at least 20% above their estimated value secured buyers during the same period.
Reducing an asking price later offers no guarantee of success. Only 19% of homes that underwent a price reduction sold within 90 days, compared with 41% among properties without a reduction.
Richard Donnell, executive director at Zoopla, said: "The extra cost of mortgages has made home buyers more selective while greater choice of homes for sale has increased the scope to negotiate on price."
He added: "Getting the price right from the start is essential. Overpricing significantly reduces the chances of selling, so sellers should seek advice from local agents on buyer demand and the right asking price for their home."
Nathan Emerson, CEO at Propertymark, said the figures highlighted growing differences between local housing markets. "The housing market is becoming increasingly localised, with higher mortgage costs putting pressure on affordability, particularly in southern England," he said.
Tom Bill, head of UK residential research at Knight Frank, warned that sellers must adjust their expectations. "Sellers increasingly need to reflect the tougher mortgage rate landscape when setting asking prices," he said.
Budget could offer relief
The findings come ahead of Wednesday's Budget. Zoopla is calling for stamp duty reforms to ease transaction costs, estimating that extending the 2% stamp duty band to £500,000 could save home movers up to £7,500. Changes for first-time buyers could deliver savings of up to £6,000, though both measures would reduce Treasury revenues.
Zoopla also believes the proposed Your First Home scheme could support new-build demand. Under suitable local price caps, the portal estimates that around a third of new homes could qualify, supporting up to 30,000 purchases annually, representing around 10% of first-time buyer transactions.
Donnell said: "The biggest boost the Budget could provide to the housing market would be to create the conditions for lower mortgage rates. We expect activity to strengthen once mortgage rates start moving back below five per cent."
