Despite budget speculation hitting sales agreed in the last quarter of the year, Zoopla’s latest house price index reveals the housing market has had its strongest year for sales in three years, with a 9% increase in home moves compared to 2024.
Stability in mortgage rates and stronger growth in household incomes encouraged more movers, Zoopla says, with a predicted 1.2 million transactions by the end of the year. However, the positivity isn’t translating into higher growth, with average UK house prices of £270,000 reflecting just a 1.1% increase over the last year – well below the 3.8% annual average over the last 10 years.
However, improvements in mortgage availability have seen first-time buyer numbers increase significantly, with an expected increase of 20% by year end.
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. Existing homeowners using a mortgage form the second largest group, at 33%, followed by cash buyers (21%) and landlords buying with a mortgage (7%).
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.”
