In its house price index, real estate firm Zoopla reported that UK home sales are plunging, on course to hit the lowest level in over a decade as mortgage costs surge due to rising interest rates.

In Britain, it is expected the number of home sales is poised to fall by 21% year over year to roughly 1 million in 2023, a drop from 1.26 million in 2022, and the 14 year record of 1.48 million of 2021, which had been fueled by ultra-low interest rates and additional pandemic-era tax discounts which boosted sales.

The report noted that over the past four weeks, the demand for residential housing has fallen by 34% compared to the average over the previous five years, due to the market being weighed down by soaring mortgage rates, and the continuing cost of living crisis.

Richard Donnell, executive director at Zoopla said, “It is the number of sales that have been hit hardest by higher borrowing costs, especially amongst mortgage reliant buyers.”

He added, “Cash buyers are more immune and on track to account for more than one in three sales in 2023.”

According to market research company MoneyFacts, a typical two-year fixed-rate mortgage presently has a rate of 6.73%, as of Tuesday, while a five-year mortgage sits at 6.21%.

According to Zoopla, the number of home sales employing mortgages will fall by 28% this year, as sales in cash will remain relatively unaffected, dropping just 1% for all of 2023.

The report stated that “rates need to fall below 5% before we see an increased appetite to move home in the second half.”

On August 3rd, the Bank of England increased interest rates for the 14th consecutive meeting, which brought the key rate which determines most mortgage lending rates to 5.25%, marking a 15-year high.

Mortgage approvals dropped in July to 49,444 authorized home loans, marking the first drop in three months according to the regulator.