First-time buyers target homes worth £10,000 more
Housing market activity is holding up in the face of uncertainty, though with fewer buyers than a year ago the outlook remains finely balanced.
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First-time buyers are targeting homes worth £10,000 more than a year ago, with average prices up 4.3% to £254,750 — nearly 3x the rate of UK house price growth
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There are 6% fewer first time buyers in the market than this time last year, but those that remain are not compromising on what they want to buy
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Overall, UK sales agreed are running 1% ahead of last year – the first positive sales agreed figure of 2026 – despite buyer demand being down 10%, as committed movers of all types continue to agree to buy homes
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UK house price inflation edges up to 1.5%, with prices rising between 2-3.6% across northern regions, and holding flat to negative in London and the South East
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Housing market activity is holding up in the face of uncertainty and higher borrowing costs, though with fewer buyers than a year ago the outlook remains finely balanced
Zoopla’s latest House Price Index reveals that first-time buyers are targeting homes worth £10,000 more than a year ago, and are not compromising on what they want to buy. First-time buyers are seeking to buy homes with average prices of £254,750, 4.3% higher than last year. This is nearly three times the headline rate of wider UK house price growth of 1.5% with an average UK house price of £271,900.
Table 1: House price inflation for all homes and the change in the average price of homes that first-time buyers are looking to buy
This explains why UK house price inflation has increased from 1.4% last month, despite overall buyer demand running 10% below last year. Sales agreed are running 1% ahead of last year, marking the first positive sales agreed figure of 2026, as committed movers continue to support transactions. However, with fewer buyers in the market, this remains finely balanced.
Fewer first-time buyers but those who are active are seeking higher value homes
The first-time buyer story is most striking in London, where average first time buyer house prices have crossed the £500,000 mark for the first time at £502,250 – £15,000 higher than last year*, in a city where overall average house prices have not moved. In Scotland, first-time buyers are seeking homes with average prices 7.9% higher than last year and 7% higher in the West Midlands, while the South West sees the lowest first time buyer-focused increase at 1.9%*.
The combination of higher mortgage rates and increased uncertainty has led to a 6% drop in first time buyer enquiries, with some sitting on the sidelines and waiting for the outlook to improve. However, those still active in the market are not compromising on what they want to buy. Zoopla’s data shows that outside London, over half of first-time buyer enquiries (53%) are for three-bed houses – the same as last year. In London the property mix is also unchanged, with over half of enquiries focused on flats.
Changes to mortgage affordability testing last year have made more homes accessible to first-time buyers, supporting both sales and house price growth. First-time buyers account for over a third of all sales each year and when this group seeks to spend more for homes, it creates upward pressure on entry-level prices that feeds through the whole market.
Table 2: Finely balanced sales market – committed movers support sales despite fewer buyers in the market
Sales ahead of last year as sellers return to market
Sales agreed are running 1% ahead of last year despite overall buyer demand being 10% lower than last year. The gap reflects a shift in the composition of the market – browsers and those sensitive to higher borrowing costs have stepped back, while buyers with a clear need to move have continued to make offers to buy homes.
This is not the first time demand has fallen sharply while sales have held firm. It happened after the 2022 mini-budget and again ahead of the Autumn Budget in 2025. On both occasions sales proved more resilient than demand.
The flow of new homes listed for sale is up 3.4% on last year. More sellers entering the market suggests households are pressing ahead despite the uncertain backdrop which is expected to support sales and pricing.
UK house price inflation has edged up to 1.5%. Across the North of England, Scotland and Wales prices are rising at 2% to 3.6%, with improved mortgage affordability having the greatest impact in these more affordable markets where there is a scarcity of homes for sale.
In London, sales agreed are up 8% on last year – the strongest of any region – though with 13% more homes for sale, buyers retain real negotiating power and price inflation in the capital is set to remain subdued. Rising sales in the capital have stabilised prices after six consecutive months of modest falls, with house price inflation in London now flat year on year.
Commenting on the report, Richard Donnell, Executive Director at Zoopla, said:
“We are in the peak months for home buyers making offers and agreeing sales. Despite fewer buyer enquiries than last year, more sales are being agreed as committed movers press ahead as mortgage rates drift lower. Many households are understandably cautious given the wider uncertainty. If you are thinking of moving, the most important step is understanding what is happening in your local market rather than relying on national trends. Getting advice from a local estate agent is important and for sellers in southern England, pricing correctly is the difference between moving and not moving this year.”
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