Regardless of finances hypothesis weighing on gross sales agreed within the ultimate quarter of final yr, the housing market is about for its strongest yr in three years.
Zoopla’s newest Home Worth Index exhibits dwelling strikes will rise by 9% in 2025, pushed by secure mortgage charges and stronger progress in family incomes.
Gross sales progress has been stronger than anticipated, with the market on the right track for round 1.2 million transactions this yr – 9% increased than 2024 and broadly according to the 10-year common.
Greater dwelling strikes isn’t translating into quicker ranges of home worth progress. Common UK home costs now stand at £270,300, 1.1% increased than a yr in the past (November 2025). That is decrease than the 1.9% improve over 2024 and nicely under the three.8% annual common over the past 10 years.
The market is locked in a north-south divide in worth progress, pushed by affordability and large variations in the price of shopping for a house. Home costs are rising quickest within the North West (2.9%) and Northern Eire (6.7%) whereas costs are falling throughout southern areas of England and by as much as -0.6% in London the place home costs and stamp obligation prices are highest.
Home worth progress varies broadly at a localised degree, with the most popular markets for worth inflation throughout Britain the Scottish Borders (TD postal space at 4.7%), adopted by Oldham (OL, 4.4%), Kirkcaldy (KY, 4.2%) and Falkirk (FK, 4.2%).
On the different finish of the spectrum, costs are posting small falls throughout southern England, significantly in coastal areas the place the additional tax on second properties and a return to workplace working is impacting demand. Home costs are 2.4% down within the Truro (TR) postal space, in addition to Torquay (TQ, -1.9%) and Bournemouth (BH, -1.8%).
First-time patrons drive improve in gross sales
Enhancements in mortgage availability means first-time purchaser numbers are on monitor to be 20 per cent increased over 2025. First-time patrons will account for nearly two in 5 dwelling purchases (39% of gross sales) in 2025, and would be the largest group of dwelling patrons adopted by current owners utilizing a mortgage (33%), money patrons (21%) and landlords shopping for with a mortgage (7%).
Whereas first-time patrons can borrow extra, this doesn’t imply they’re shopping for increased worth properties. Zoopla knowledge on what first-time patrons want to purchase exhibits that they want to spend extra in regional markets, by as much as 5 per cent in comparison with a yr in the past. Nevertheless, in London they want to purchase properties which might be three per cent cheaper than a yr in the past, reflecting increased stamp obligation prices with costs flat throughout southern England.
Forecasts for the housing market in 2026
Zoopla expects common UK home costs to extend by 1.5% over 2026 with a stronger than ordinary begin to 2026 as a result of a launch of pent-up demand as patrons return to the market having delayed choices within the run-up to the finances. This may help housing gross sales, that are anticipated to complete 1.18m over 2026.
Home costs are anticipated to proceed to rise at an above-average tempo, over 2.5%, throughout the Midlands, northern England, Scotland and Northern Eire in 2026. Decrease home costs in northern England and Scotland imply higher purchaser affordability and better charge of home worth inflation. Zoopla expects this north-south divide in worth inflation to proceed over 2026.
Common UK home costs are projected to be 1.5% increased over 2026 with an annual common improve of two.1% a yr between 2027 and 2029 as housing affordability continues to steadily reset and helps the variety of gross sales.
Richard Donnell, Govt Director at Zoopla, mentioned: “2025 has been a powerful yr for dwelling strikes however the Funds hit exercise within the ultimate months of the yr and noticed many shifting choices placed on maintain. Now the uncertainty has lifted, we anticipate a stronger than ordinary begin to 2026 as patrons return to the market. The urge for food to maneuver dwelling stays robust however affordability stays a constraint for these shopping for their first dwelling or seeking to trade-up to a bigger dwelling which is able to hold costs in test.
“There stays loads of properties on the market, which is able to increase purchaser selection as we begin the brand new yr. Common UK home costs are projected to be 1.5% increased over 2026 with a continued divide between southern England and the remainder of the nation the place affordability is healthier and shopping for prices are decrease.
“It is necessary that sellers stay real looking on pricing to safe gross sales in 2026, particularly throughout southern England. Owners seeking to transfer within the yr forward ought to perceive the worth of their dwelling and what they’ll afford earlier than beginning their property search.”
Property business reacts to Zoopla Home Worth Index
