Brits moved home at the highest rate for three years in 2025, but this frenetic buying and selling activity failed to translate into higher prices, according to the latest Zoopla house price index.
And house prices are expected to prove only slightly stronger in 2026, with a modest increase predicted by the online property listing firm.
There were 9% more home moves over 2025 than in 2024, by Zoopla’s calculations, despite uncertainty around the Autumn Budget hitting sales agreed in the last quarter of the year.
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Stability in mortgage rates and stronger growth in household incomes encouraged more people to up sticks, with the market on track for 1.2 million transactions over 2025. This is in line with the 10-year average.
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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.”
However property buyers continued to drive hard bargains in 2025 and the three-year-high for sales activity did not convert into higher prices for home sellers.
Average UK house price
Average UK house prices now stand at £270,300, according to Zoopla. This is 1.1% higher than a year ago, but lower than the 1.9% increase over 2024 and well below the 3.8% 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%) and Northern Ireland (6.7%). Meanwhile prices are falling across southern regions of England – and by up to -0.6% in London where house prices and stamp duty costs are highest.
Donnell said: “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.”
Regional differences in property prices
Sellers in the Scottish Borders are enjoying the highest price increases, with the TD postal area (Tweeddale) at 4.7%, followed by Oldham (OL, 4.4%), Kirkcaldy (KY, 4.2%) and Falkirk (FK, 4.2%).
However it is more of a buyers’ market 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% down in the Truro (TR) postal area, as well as Torquay (TQ, -1.9%) and Bournemouth (BH, -1.8%).
First-time buyers drive increase in sales
More and cheaper mortgages mean first-time buyers have been a huge driving force in the 2025 house buying market, with their numbers on track to be 20% higher over the year, Zoopla said.
First-time buyers will account for almost two in five home purchases (39% of sales) in 2025, and will be the largest group of home buyers. They are followed by existing homeowners using a mortgage (33%), cash buyers (21%) and landlords buying with a mortgage (7%).
Polly Ogden Duffy, managing director at estate agents 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.”
Yet 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 using online listings shows they are seeking to spend more in typically cheaper regional markets, by up to 5% compared to a year ago. However, in London they are looking to buy homes that are 3% 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% over 2026. This, it said, will be led by 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.
Across the Midlands, northern England, Scotland and Northern Ireland in 2026, house prices are expected to continue to rise at an above-average pace of more than 2.5%.
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.
Zoopla is also predicting an annual average house price increase of 2.1% a year between 2027 and 2029 as housing affordability continues to steadily reset and supports the number of sales.
Donnell, executive director at Zoopla, said: “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.”
