First-time buyers help drive the most home moves for three years
Zoopla forecasts 1.5% house price growth for 2026
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Housing sales hit 1.2 million over 2025 despite Q4 Budget slowdown
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More sales doesn’t mean faster price growth – house prices rise just 1.1 per cent (vs 1.9 per cent in 2024)
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The hottest markets for price growth across Britain are the Scottish Borders (TD postal area at 4.7 per cent), followed by Oldham (OL, 4.4 per cent), Kirkcaldy (KY, 4.2 per cent) and Falkirk (FK, 4.2 per cent).
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First-time buyers accounted for two in five (39 per cent) of sales in 2025, and are set to remain the largest buyer group in 2026
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Zoopla expects average UK house prices to increase by 1.5 per cent over 2026
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North-south divide in house price growth to remain
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Housing sales are expected to be two per cent lower in 2026 at 1.18m
Despite budget speculation hitting sales agreed in the last quarter of the year, Zoopla’s latest House Price Index reveals the housing market will have its strongest year for sales in three years with nine per cent more home moves over 2025.
Most home moves for three years but price growth slows
Stability in mortgage rates and stronger growth in household incomes has encouraged more home moves over 2025. The increase in housing sales has been stronger than expected, with the market on track for 1.2m transactions over 2025. This is nine per cent higher than last year and in line with the 10-year average.
Although it’s positive to see more home moves, this is not translating into faster levels of house price growth. Average UK house prices now stand at £270,300, 1.1 per cent higher than a year ago (November 2025). This is lower than the 1.9 per cent increase over 2024 and well below the 3.8 per cent annual average over the last 10 years.
The market is locked in a north-south divide in price growth, driven by affordability and big variations in the cost of buying a home. House prices are rising fastest in the North West (2.9 per cent) and Northern Ireland (6.7 per cent) while prices are falling across southern regions of England and by up to -0.6 per cent in London where house prices and stamp duty costs are highest.
House price growth varies widely at a localised level, with the hottest markets for price inflation across Britain the Scottish Borders (TD postal area at 4.7 per cent), followed by Oldham (OL, 4.4 per cent), Kirkcaldy (KY, 4.2 per cent) and Falkirk (FK, 4.2 per cent).
At the other end of the spectrum, prices are posting small falls across southern England, particularly in coastal areas where the extra tax on second homes and a return to office working is impacting demand. House prices are 2.4 per cent down in the Truro (TR) postal area, as well as Torquay (TQ, -1.9 per cent) and Bournemouth (BH, -1.8 per cent).
First-time buyers drive increase in sales
Improvements in mortgage availability means first-time buyer numbers are on track to be 20 per cent higher over 2025. First-time buyers will account for almost two in five home purchases (39 per cent of sales) in 2025, and will be the largest group of home buyers followed by existing homeowners using a mortgage (33 per cent), cash buyers (21 per cent) and landlords buying with a mortgage (7 per cent).
While first-time buyers can borrow more, this doesn’t mean they are buying higher value homes. Zoopla data on what first-time buyers are looking to buy shows that they are looking to spend more in regional markets, by up to five per cent compared to a year ago. However, in London they are looking to buy homes that are three per cent cheaper than a year ago, reflecting higher stamp duty costs with prices flat across southern England.
Forecasts for the housing market in 2026
Zoopla expects average UK house prices to increase by 1.5 per cent over 2026 with a stronger than usual start to 2026 due to a release of pent-up demand as buyers return to the market having delayed decisions in the run-up to the budget. This will support housing sales, which are expected to total 1.18m over 2026.
House prices are expected to continue to rise at an above-average pace, over 2.5 per cent, across the Midlands, northern England, Scotland and Northern Ireland in 2026. Lower house prices in northern England and Scotland mean better buyer affordability and higher rate of house price inflation. Zoopla expects this north-south divide in price inflation to continue over 2026.
Average UK house prices are projected to be 1.5 per cent higher over 2026 with an annual average increase of 2.1 per cent a year between 2027 and 2029 as housing affordability continues to steadily reset and supports the number of sales.
Commenting on the report and outlook, Richard Donnell, Executive Director at Zoopla, said:
“2025 has been a strong year for home moves but the Budget hit activity in the final months of the year and saw many moving decisions put on hold. Now the uncertainty has lifted, we expect a stronger than usual start to 2026 as buyers return to the market. The appetite to move home remains strong but affordability remains a constraint for those buying their first home or looking to trade-up to a larger home which will keep prices in check.
“There remains plenty of homes for sale, which will boost buyer choice as we start the new year. Average UK house prices are projected to be 1.5% higher over 2026 with a continued divide between southern England and the rest of the country where affordability is better and buying costs are lower.
“It is important that sellers remain realistic on pricing to secure sales in 2026, especially across southern England. Homeowners looking to move in the year ahead should understand the value of their home and what they can afford before starting their property search.”
Polly Ogden Duffy, Managing Director at John D Wood & Co said
“First time buyers drive every part of the property market. When they kick-start activity at the entry level, it creates momentum throughout the entire system, allowing chains to form and transactions to progress across the country. With a continued shortage of rental homes pushing rents to record highs, buying is increasingly the more affordable option for many households – provided they can pass affordability checks and secure a mortgage. That’s why the recent easing of affordability criteria is such a positive step. In many cases, buyers can comfortably manage monthly repayments but have historically struggled to access lending. Greater flexibility from lenders is beginning to change that, helping more people make the leap onto the property ladder. Supporting first time buyers in this way is critical to maintaining healthy levels of market activity into 2026.”
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UK House Price Index for December 2025
