Zoopla’s House Price Index for August, published on 27 August 2026, says searches for homes are 7% higher than a year ago. That is the strongest annual increase for 12 months, and the first time since August 2025 that every region and country of the UK is up. Sales agreed are still 6% lower than last year.
The Bank of England’s Money and Credit release for July, published on 1 September 2026, has net mortgage borrowing falling to £4.3 billion from £7.7 billion in June, down about 44% in a month. Interest is rising while the money behind it shrinks. That looks like a funding constraint, not a loss of appetite.
More searching, less buying
The Zoopla increase reaches every region, though not evenly. Searches rose 8.9% in the South East and 8.5% in the East of England, and the North West, the slowest region Zoopla names, was up 0.7%. Zoopla labels this searches, though its own methodology note describes buyer enquiry data. Either way it is a proxy, not a measure.
The approvals have not followed. Bank of England approvals for house purchase came in at 56,100 in July, below the previous six-month average of around 60,800, while remortgage approvals rose to 34,500 from 34,100.
The RICS residential survey for July, published on 13 August 2026, had new buyer enquiries at a net balance of minus 28% and agreed sales at minus 30%, both unchanged on June and above spring lows of minus 41% and minus 37%. A net balance nets risers against fallers, so minus 28% means far more agents saw enquiries fall than rise.
The two count different things, a portal logging anyone browsing and RICS what agents see through the door, but under both demand is recovering from a low base, not surging. Prices have barely moved either way. Nationwide’s August index, published on 1 September 2026, has them up 0.2% on the month and 1.6% on the year. This is a slow market, not a falling one.
Borrowing power fell 9% this year
Zoopla puts the average five-year fixed rate at around 4.8% in August, against below 4% in January. These are owner occupier figures, on a new 75% loan-to-value five-year fix at large banks. On its own worked example, a buyer who could fund a £200,000 mortgage in January can now borrow around £182,000 for the same monthly repayment, with no change in income or deposit. That is a 9% cut in buying power since January. The calculation is Zoopla’s rather than an independent one.
That is the clearest single explanation for the gap. The ceiling on what a funded buyer can bid has come down, and asking prices have not. For a landlord weighing an exit, what decides it is not how many view the listing but what the best-funded can raise.
Why cheap fixed rates may not last
Fixed mortgage pricing follows swap rates, the price a lender pays for certainty about its own funding cost, rather than Bank Rate. That is why the two can move apart, and we set the mechanism out in Bank Rate held at 3.75% but mortgage costs keep rising. Bank Rate is 3.75% and the Bank of England’s Monetary Policy Committee next announces on 17 September 2026.
The swap side moved this week. The Guardian reported on 3 September 2026 that the UK five-year swap rate rose above 4.52%, its highest since October 2023, after a global bond sell-off pushed the 10-year gilt yield to its highest level since 2008. The same report had Moneyfacts putting the average two-year fix at 5.59% and the five-year at 5.63%, which differ from Zoopla’s 4.8% because Moneyfacts averages a far wider product spread.
Most fixed rates quoted today were priced off cheaper swaps than the market trades this week. If swaps hold here, quoted rates follow within weeks. The honest counter is that swaps are volatile and one week is not a trend. The same Guardian report carries a Yorkshire Building Society comment to the BBC putting the past week’s move at 0.1 percentage points, against 0.5 points in the 10 days after the Tehran airstrikes. That is fair, and no reason to assume fixed rates only fall.
The 3.4% rate that costs 5.8%
Buy to let pricing moved the other way. Paragon cut its core range by 15 basis points on 1 September 2026, with two-year fixes at 75% loan-to-value from 3.40% for properties rated EPC A to C. That rate carries a 5% fee and £500 cashback.
Run the total cost, not the headline. On a £200,000 loan a 5% fee is £10,000. Net of the £500 cashback that is £9,500 over a two-year fix, about £4,750 a year, roughly 2.4% of the loan. The all-in cost sits nearer 5.8% than 3.4%. That is a cost comparison, not an interest rate.
This is not a criticism of the lender. Fee-loaded pricing is legitimate, and the low pay rate cuts monthly interest during the fix. It does not get cheaper with size, because a percentage fee scales with the loan while the cashback does not. A longer fix is what makes the sums work. Our guide to the buy to let remortgage stress test covers the other half, which is whether the rent supports the loan at all.
What this means for property investors
Re-underwrite at today’s advance, not January’s. On Zoopla’s residential example a buyer on the same monthly payment has roughly 9% less to spend. Buy to let works differently. The advance is set by the rent and a stressed rate rather than the pay rate, and it caps far lower, at 75% loan to value on HSBC’s published criteria against 95% for a first time buyer.
Rising searches with falling sales agreed is what you would expect where funding is the binding constraint, so treat interest and capacity separately. Selling, that means testing a price against what a funded bidder can raise, not against viewing numbers. Buying, a cash or low loan-to-value position carries more weight than in January.
Watch 17 September, but watch the swap curve more closely. The Committee sets Bank Rate, lenders set fixed rates, and the second decides your next purchase cost.
BlackBook Investments is a property brokerage, not a mortgage, tax or investment adviser. Nothing here is a recommendation on any product or on your position. Take regulated advice before acting.
If you are weighing an exit, our free property valuation tests a price against real buyer capacity. If you are buying, see the current off-market listings.