First-time buyers are targeting homes worth £10,000 more than a year ago despite higher borrowing costs and ongoing economic uncertainty, according to the latest House Price Index from Zoopla.
The data shows average first-time buyer target prices have risen 4.3% year-on-year to £254,750 – almost three times faster than wider UK house price growth, which currently stands at 1.5%.
The figures come as the wider housing market continues to show resilience despite a slowdown in buyer activity. Sales agreed are now running 1% ahead of this time last year – the first positive sales figure recorded in 2026 – even though overall buyer demand remains 10% lower year-on-year.
Zoopla says the data suggests committed movers are continuing to push ahead with transactions while more cautious buyers remain on the sidelines amid economic uncertainty and higher mortgage rates.
BEHAVIOURAL CHANGE
The report highlights London as the clearest example of changing first-time buyer behaviour, with average target purchase prices now exceeding £500,000 for the first time, reaching £502,250 – £15,000 higher than a year ago despite flat wider house price growth across the capital.
Across the UK, first-time buyer demand has fallen by 6%, but those still active in the market are showing little willingness to compromise on size or location.
Outside London, more than half of first-time buyer enquiries continue to focus on three-bedroom homes, while flats remain the dominant target in the capital.
Northern regions continue to outperform southern England on price growth, with values rising between 2% and 3.6% across northern England, Scotland and Wales.
In contrast, house price inflation across London and the South East remains flat or negative as buyers retain strong negotiating power due to higher levels of available stock.
The number of new homes coming to market is also 3.4% higher than a year ago, indicating sellers are continuing to press ahead despite the uncertain backdrop.
ADVICE CRUCIAL
Richard Donnell (main picture, inset), Executive Director at Zoopla, says: “We are in the peak months for home buyers making offers and agreeing sales. Despite fewer buyer enquiries than last year, more sales are being agreed as committed movers press ahead as mortgage rates drift lower.
“Many households are understandably cautious given the wider uncertainty. If you are thinking of moving, the most important step is understanding what is happening in your local market rather than relying on national trends.
“Getting advice from a local estate agent is important and for sellers in southern England, pricing correctly is the difference between moving and not moving this year.”
INDUSTRY REACTION
Nathan Emerson, CEO of Propertymark, says: “Although overall buyer demand remains below last year’s levels, it is encouraging to see agreed sales edging ahead as committed movers continue to drive activity across the housing market.
“First-time buyers remain a crucial part of the market, and the fact that many are aiming for higher-value homes demonstrates ongoing confidence and determination to get onto the property ladder despite affordability pressures.
“However, higher borrowing costs and wider economic uncertainty continue to present challenges for many households, particularly across southern England, where affordability remains stretched. Buyers and sellers alike are increasingly relying on the expertise of local agents to navigate changing market conditions, price homes accurately, and make informed decisions based on local demand.
“As mortgage affordability improves gradually and more homes come to market, stability and confidence will remain key to sustaining momentum through the remainder of 2026.”
SUSTAINED PRESSURE
Tom Bill, Head of UK Residential Research at Knight Frank, says: “Higher mortgage rates mean the UK housing market will come under gradual and sustained pressure this year rather produce a cliff-edge moment.
“Buyers sitting on mortgage offers that pre-date the Middle East conflict feel a sense of urgency to act while others have seen their spending power eroded.
“Over time the second group will become larger than the first, particularly as inflationary pressures persist, which will put moderate downwards pressure on prices.”
STRATEGIC FOCUS
James Nightingall of HomeFinder AI says: “We are seeing first-time buyers become far more strategic and long-term focused.
“Many would rather stretch an extra £10,000–£20,000 today for better transport links, green space or future resale appeal than compromise and move again in a few years.”
RESILIENT MARKET
Iain McKenzie, CEO of The Guild of Property Professionals, says: “Zoopla HPI data underlines just how determined first-time buyers remain, despite a more cautious economic backdrop. While wider UK house price growth remains relatively modest at 1.5%, the fact that first-time buyer budgets have risen by 4.3% highlights continued confidence among committed movers, especially those focused on long-term lifestyle needs rather than short-term market fluctuations.
“The resilience of the housing market continues to stand out.
“Even though overall buyer demand has softened, sales agreed moving back into positive territory for the first time this year demonstrates that many buyers are still pressing ahead with their plans.
“Whether driven by growing families, job changes or other life events, there will always be people who need to move regardless of wider economic uncertainty.
“Encouragingly, mortgage approvals are improving, homes are selling faster than they were earlier in the year, and lenders are becoming increasingly competitive as mortgage rates begin to stabilise.
“Combined with inflation easing and the interest rate being held steady, this is helping to support confidence across the market.
“At the same time, buyers are becoming more price-sensitive and selective, particularly as housing supply reaches its highest level in over a decade.
“Sellers who understand their local market and price realistically are continuing to attract strong interest, while buyers are benefitting from greater choice and negotiating power.”
DEMAND DROP
Jeremy Leaf, north London estate agent and a former RICS Residential Chairman, says: “Zoopla has confirmed what we have been seeing in our offices over the past few months: a drop in buyer demand, but those who are in the market are serious about moving — it really is a case of quality over quantity.
“Those motivated buyers on the lookout for a new home are taking advantage of their negotiating position, particularly given the backdrop of ongoing concerns about the Iran war and knock-on effects on the cost of living and mortgage rates.
“As a result, transactions are taking longer, leaving sellers – particularly those with larger homes often caught in longer chains – more exposed to renegotiation or deals falling through.”
PRICE CONSCIOUS
Marc von Grundherr, Director of Benham and Reeves, says: “London continues to demonstrate remarkable resilience and while headline house price growth across the capital remains largely flat, the fact that sales agreed are up 8% year-on-year tells a very different story beneath the surface.
“Buyers remain active, but they are also more price conscious and selective than they were during the market highs of recent years.
“At the same time, increased stock levels are giving them greater negotiating power and this is helping to keep price growth subdued despite strong levels of transactional activity.
“What’s particularly notable is the strength of the first-time buyer market, with average target purchase values now surpassing the £500,000 mark for the first time.
“This suggests that while some buyers may have stepped back due to higher borrowing costs, those who remain committed are still prepared to stretch for the right property in the right location.”
ECONOMIC UNCERTAINTY
Verona Frankish, CEO of Yopa, says: “While there remains a degree of economic uncertainty, the latest market data shows that the UK property market continues to hold up remarkably well and, importantly, transactional activity is moving in the right direction.
“The fact that sales agreed have edged ahead of last year for the first time in 2026 is an encouraging sign that committed buyers and sellers are continuing to press ahead despite a more cautious wider backdrop.
“We’re also seeing the strongest levels of house price growth continue to come from more affordable northern markets where improved mortgage affordability has had the greatest impact. At the same time, first-time buyers remain highly motivated and are clearly unwilling to compromise when it comes to the type and quality of home they want to buy.
“Overall, this remains a market driven by necessity and long-term confidence rather than short-term speculation and that is helping to create a far more stable foundation for sustained market activity.”
WARNING SIGN
Chris Hodgkinson, Managing Director of House Buyer Bureau, says: “While the market has remained more resilient than many expected, the decline in buyer demand is still a very important warning sign and one that is likely to impact both transaction times and seller expectations over the months ahead.
“We’re increasingly seeing a market where committed buyers are still progressing purchases, but where a significant proportion of more hesitant or discretionary movers have stepped back to assess the economic outlook and direction of mortgage rates.
“This reduction in buyer activity inevitably creates a more drawn out sales process, particularly for sellers who fail to price realistically from the outset.
“As a result, many homes are taking longer to sell, reductions are becoming more common and overall market sentiment remains finely balanced.
“Whilst sales levels are holding steady for now, the market remains highly sensitive to affordability pressures and confidence levels and so any further economic uncertainty could quickly weigh on activity.”
