Buyer confidence is edging back into the housing market at the start of 2026, helped by easing mortgage rates and intense competition between lenders.
But the balance of power is tilting as a growing number of homes come up for sale, according to Zoopla’s latest UK House Price Index.
Buyer demand has recovered since the turn of the year following a subdued end to 2025, when uncertainty around the autumn Budget led many households to pause moving plans.
Activity levels are now broadly in line with early 2024, although still around 9% lower, and remain below the unusually strong start to 2025, when buyers rushed to transact ahead of stamp duty changes.
IMPROVED AFFORDABILITY
Affordability has improved as mortgage rates have continued to ease. The average five-year fixed rate at 75% loan-to-value has fallen to around 4%, the lowest level since 2022, supporting confidence and widening the pool of buyers able to consider a move.
However, buyers returning to the market are encountering very different conditions to a year ago.
The total number of homes for sale is 6% higher year on year, with agents marketing the highest level of stock seen in eight years.
This increase in supply is easing competition between buyers and shifting the focus firmly onto pricing, presentation and realism from sellers.
At a national level, house price growth remains modest. The average UK house price increased by 1.2% over the past 12 months, rising by around £3,200 to £269,800 by the end of 2025.
AROUND THE REGIONS
Growth is being driven by more affordable regions, with prices rising up to four times faster across parts of the Midlands, northern England, Scotland and Northern Ireland.
In contrast, prices across the South East and South West slipped by around -0.1%.
In southern England, higher purchase costs and a larger supply of homes are making buyers more price-sensitive.
London, in particular, has significantly more properties on the market than a year ago, reinforcing a buyers’ market in the capital and placing downward pressure on prices through 2025.
Zoopla said the increase in available homes is encouraging more buyers back into the market, underlining the underlying desire to move.
But it warned that sellers need to take local market conditions seriously, as well-priced homes continue to attract demand while overpriced stock risks sitting unsold.
CONFIDENCE RETURNING
Richard Donnell (main picture, inset), Executive Director at Zoopla, says: “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.
“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.”
INCREASED CHOICE
Nathan Emerson, CEO of Propertymark, says: “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.”
NOT AS ROSY
Tom Bill, Head of UK Residential Research at Knight Frank, adds: “While the pressure on mortgage rates was down in the first fortnight of the year, borrowing costs have climbed sharply since mid-January. T
“he 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.”
