Three out of five homes listed in January in the UK remain unsold in the market, according to the latest data from property portal Zoopla. The high mortgage rates have frustrated home buyers, making it unaffordable to purchase them. The lack of demand has left several high-cost properties unsold, including in promising localities. The real estate market is facing significant challenges, as wages are not catching up with the rising prices.

Zoopla reported that agreed sales have fallen 7% below last year’s deals. Each zone in the country is facing low demand, with sales decreasing by 12% in Wales and 11% in the East Midlands. First-time buyers are the most exposed to high mortgage rates, making them uncomfortable about striking a deal. A larger part of their monthly income will be committed to EMIs, leaving them with minimal savings.

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Not Just Mortgage, High-Priced Houses Remain Unsold

Apart from high mortgage rates, houses that have been priced at market rates usually have sold out. Homes that are priced above the market rate are mostly sitting idle, with owners struggling to make a deal. “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.”

“Sales are taking much longer, and it is proving increasingly difficult to generate commitment,” said Jeremy Leaf, an estate agent in north London. “However, the overwhelming majority of sales which have been agreed are proceeding, although inevitably more slowly,” he said. A housing market correction could be expected if the situation continues for a longer period. Mortgage and high-priced properties will largely make first-time buyers stay out of the market. Sellers will find it difficult and time-consuming to make a sale.