"After a weak end to 2025, home buyer confidence is returning as mortgage rates ease and those who delayed decisions last year return to the market"
- Richard Donnell - Zoopla
Buyer demand has rebounded since the beginning of the year following a quieter end to 2025, when many households delayed moving decisions amid uncertainty around the autumn Budget.
Activity levels are now broadly in line with early 2024, down 9% year-on-year, although they remain below last year's unusually strong start when buyers rushed to complete purchases ahead of stamp duty changes.
Fierce competition in the mortgage market and lower mortgage rates are supporting confidence. The average five-year fixed mortgage rate at 75% loan-to-value has fallen to 4%, its lowest level since 2022, improving affordability and enabling more households to consider a move.
Buyers are entering a very different market from a year ago, according to Zoopla's latest UK House Price Index. The total number of homes for sale is 6% higher than last year, with estate agents marketing the largest number of properties seen in eight years. This increase in supply is easing competition between buyers and placing greater emphasis on realistic pricing and good presentation from sellers.
The average UK house price increased by 1.2% over the last 12 months, rising by £3,200 to stand at £269,800 at the end of 2025. Market conditions vary across the country, with prices increasing up to four times faster in more affordable parts of the Midlands, northern England, Scotland and Northern Ireland. In contrast, smaller price falls of 0.1% were recorded across the South-East and South-West regions.
Buyers in southern England are more price-sensitive due to higher buying costs and a greater supply of homes for sale. London now has significantly more homes on the market than a year ago, reinforcing a buyers' market in the capital and pushing prices lower over 2025.
More homes for sale mean more buyers in the market, demonstrating that the desire to move home remains strong. However, sellers must factor in local market conditions as they plan their move. Zoopla expects current trends in market activity to continue over the early part of the year, with good demand persisting for homes that are well priced.
"After a weak end to 2025, home buyer confidence is returning as mortgage rates ease and those who delayed decisions last year return to the market," said Richard Donnell, executive director at Zoopla. "The first few weeks have seen buyer demand fall short of the very strong start to 2025 when buyers were rushing to beat the stamp duty deadline."
"Market conditions vary across the country and are defined by the level of choice for home buyers. There are more homes for sale and more choice is welcome news for buyers, but sellers need to adapt to a more competitive market where pricing and presentation really matter for serious sellers looking to move in 2026."
Tom Bill, head of UK residential research at Knight Frank, said, “While the pressure on mortgage rates was down in the first fortnight of the year, borrowing costs have climbed sharply since mid-January."
"The reasons include stronger-than-expected UK economic data, global jitters around the prospect of fiscal loosening in Japan and similar concerns over the tax and spend plans of any successor to Keir Starmer. Everything is still finely-poised, but it means the current outlook for the UK housing market is slightly less rosy than it was at the start of the year.”
Nathan Emerson, CEO of Propertymark, comments, “Buyer confidence is slowly returning as mortgage rates ease, but this is a very different market compared to the one seen a year ago. Increased choice means buyers are taking more time, negotiating harder, and are far more price-sensitive, particularly in higher-value areas.
“For sellers, this underlines the importance of realistic pricing and good presentation from the outset. Homes that are priced correctly are still attracting interest and achieving sales, but those that are over-optimistic are more likely to sit on the market.
“While affordability pressures remain, the fact that buyers are re-engaging shows there is a strong underlying demand to move. With more stock available, Propertymark member agents are playing a crucial role in guiding both buyers and sellers through changing local market conditions to help transactions progress in 2026.”
