The number of houses sold in the UK this year is on track to be the lowest since 2012, according to property website Zoopla.

About one million sales are set to be completed this year, with transactions almost a fifth lower than in 2022, the BBC reports.

Mortgage and rent costs have risen sharply since banks started increasing rates on lending.

Houses bought with cash, where buyers are not relying on a mortgage, are expected to hold up relatively well.

Existing homeowners using a mortgage to buy a house typically account for a third of annual sales.

According to Zoopla, those buyers are now more likely to wait until the outlook for rates becomes more favourable, despite property prices falling in some parts of the UK.

The average rate on a two-year fixed mortgage deal is 6.74%, according to the financial information service Moneyfacts. The typical rate for a longer five-year deal is 6.22%.

Mortgage costs are much higher now than the ultra-low rates of less than 2% many homeowners enjoyed in previous years.

The Bank of England has increased its benchmark rate 14 times in a row to reach its current level of 5.25% as it seeks to slow soaring prices.

Zoopla said sales of smaller, more affordable properties have not been hit as badly as transactions involving three and four-bedroom homes.

New purchases of buy-to-let homes have also been squeezed by higher mortgage rates.

The cost of rent has risen sharply against a backdrop of more costly mortgages, with many tenants struggling to find affordable housing as landlords increase rents to cover their higher costs.