Homebuyers looking to put down a deposit on a London property need to stump up, on average, an extra £35,500 since January, as rising mortgage rates in the first half of the year weighed on their buying power. Across the country, deposits need to grow by an average of £18,200 compared with the start of the year, new research from Zoopla has found.

The cost of fixed-rate mortgages increased in March following the start of the Israel-Iran conflict, which rattled global markets and pushed up borrowing costs. From 4 per cent before the conflict, the average fixed mortgage rate peaked at nearly 5 per cent in April, before falling back to around 4.8 per cent currently. A buyer who could previously afford a £200,000 mortgage could now borrow around £182,000 for the same monthly payment — a 9 per cent reduction in buying power.

Richard Donnell, executive director at Zoopla, said affordability remains an important factor. The firm detected the first signs of buyers returning, with a 7 per cent rise in searches. Search activity was strongest in the South East (up 8.9 per cent) and the East of England (up 8.5 per cent). Jeremy Leaf, a north London estate agent, said modest rises in mortgage costs have reinforced the buyer's hand. Lucian Cook of Savills noted the Financial Conduct Authority's relaxed affordability approach could reduce the deposit hurdle.