Zoopla’s April House Price Index finds cooling demand and expanded supply, but notes that the relaxation of mortgage affordability rules could boost buying power by up to 20%.
Although buyer demand has cooled since the stamp duty changes, it remains 1% higher than this time last year. The number of homes for sale has risen by 12% and agreed sales are up 6%. Annual UK house price inflation for March is at +1.6%.
‘Buyer demand has cooled in recent weeks as the supply of homes for sale continues to expand, slowing house price inflation’, Zoopla’s executive director of research Richard Donnell explained. ‘We expect continued growth in sales agreed, and slow but steady house price inflation’.
The report also attributes buyer caution to the impact of US tariffs, stamp duty changes and economic uncertainty. However, relaxed lending rules could offer a boost in the coming months, Zoopla predicts. The report notes:
“Lenders are starting to adjust how they stress test the affordability of new mortgages. We estimate this could boost buying power by 15-20%, supporting demand and sales agreed rather than boosting house prices.”
Although buyer demand was 10% up on last year in the early months of 2025, Zoopla says it has cooled in recent weeks and is now broadly in line with last year’s levels. Sales, however, continue to grow:
“There were 15% more homes listed for sale in the last month compared to a year ago. The average estate agent currently has 34 homes for sale, compared to 31 this time last year and a low of 15 in 2022 during the pandemic boom. Many of these sellers are also buyers, which explains why sales agreed continue to increase.”
In the short-term, Zoopla expects ongoing economic uncertainty to temper demand. The report notes:
“We expect market activity to continue to track in line with 2024 levels. However, ongoing uncertainty around the impact of tariffs on the UK’s economy will continue to weigh on demand in the coming weeks.
“While UK economic growth is expected to be weaker in 2025, growth in average earnings (5.6%) remains well ahead of general inflation. Current expectations are that the Bank of England may have scope to further lower the UK base rate this year. This would ensure the cost of average fixed-rate mortgage remains in the 4-5% range.
“This points to a general continuation of current housing market trends, with steady growth in sales as more sellers come to the market but with house price inflation remaining in check.”
Regionally, house price inflation reflects a north-south divide, with 6% in Northern Ireland, 3% in the North West of England and 2.7% in Scotland. The South East is at just 0.3%, London at 0.7% and the South West at 0.8%.
Zoopla said of the regional variations:
“House price inflation is still sitting at less than 1% across southern regions of England where affordability pressures are greatest. House prices in these regions are high relative to household incomes, while the recent end of the stamp duty boost has dampened demand.
In contrast, prices are rising by 2.2% – 3% across the West Midlands, the Northern regions, Wales and Scotland. Prices are 6% higher in Northern Ireland. House prices are lower in these areas, and buying a home is accessible to a greater number of households.”
Overall, the property company predicts house price growth will slow towards 1% to 1.5% in the coming months, with 5% more sales in 2025 ‘as long as sellers remain realistic on pricing’.
