The UK housing market has entered 2026 with a sense of renewed momentum, driven by a combination of easing mortgage rates and increased property availability. For homebuyers across the country, the latest data from Zoopla’s House Price Index (HPI) offers a nuanced picture of the market, reflecting both the lingering challenges of the previous year and reasons for cautious optimism as the new year unfolds.

According to Zoopla’s most recent figures, the average mortgage rate for new loans fell to 4% in December 2025, marking the lowest level since September 2022. This reduction in borrowing costs is credited with reigniting interest from buyers who had previously postponed their plans amid economic uncertainty and higher rates. Richard Donnell, Zoopla’s executive director of research, noted that “the 2026 market has hit the ground running with a rebound in demand levels, following a quiet end to 2025.” With mortgage rates stabilizing at their lowest point in three years, buyers are returning to the market in greater numbers, benefiting from a wider selection of homes than at any time in the past eight years.

The landscape for UK homebuyers, however, remains complex. While the average UK house price increased by 1.2% over the last 12 months, up £3,200 to stand at £269,800 at the end of 2025, this growth is modest compared to previous years and reveals significant regional variation. The north west of England led the country with a 3.5% annual rise in house prices, demonstrating the strength of demand in more affordable areas. In contrast, London saw a 0.7% decline, a change attributed by Zoopla to persistent affordability challenges, higher stamp duty costs, and a surge in the number of homes available for sale. The Midlands, northern England, Scotland, and Northern Ireland all experienced price increases at up to four times the national average, highlighting the continued appeal of regions where property remains relatively accessible.

Stock levels have also increased notably. In the four weeks leading up to January 20, 2026, the total number of homes for sale was 6% higher than the same period last year, with estate agents now marketing an average of 34 properties each, which is the highest figure in eight years. This influx of available homes is easing competition among buyers and shifting the dynamics toward a more balanced market. Sellers are now facing greater scrutiny on pricing and presentation, as buyers, empowered by more choice, are becoming more selective and price sensitive. 

Propertymark’s chief executive, Nathan Emerson, emphasized that “increased choice means buyers are taking more time, negotiating harder, and are far more price-sensitive, particularly in higher-value areas.”

The overall volume of transactions also paints an encouraging picture. A total of 1.2 million homes were sold in 2025, the highest number since the onset of the pandemic. This demonstrates a strong underlying desire among UK residents to move, even as the market navigated a period of subdued growth. Tanya Elmaz, managing director of intermediary sales at Together, described 2025 as a challenging year, with modest house price growth reflecting persistent inflation and heightened borrowing costs. Many buyers and sellers paused their decisions amid uncertainty around the national Budget. However, Elmaz believes the sector is now poised for a rebound, as falling mortgage rates and increased housing supply restore confidence and encourage action among those who had previously delayed their moves.

Buyer demand, while improved since the end of 2025, has not fully returned to the exceptionally high levels seen at the start of that year—when many rushed to complete transactions ahead of a stamp duty deadline. Still, activity levels are now broadly in line with early 2024, and the steady influx of new listings suggests that momentum is building for the months ahead. Richard Donnell of Zoopla summarized the situation by stating, “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.”

For UK homebuyers in 2026, the implications are clear. Falling mortgage rates and greater choice are making it easier for many to contemplate a move, but the market remains competitive, especially in higher value areas where affordability pressures persist. Buyers are taking advantage of improved conditions to negotiate more assertively, while sellers must be realistic about pricing and ensure their properties are well presented to attract interest. The regional disparities in price growth also underline the importance of location, with more affordable areas continuing to see robust demand and upward price movements.

Looking ahead, industry experts remain cautiously optimistic. The combination of increased housing supply, lower borrowing costs, and returning buyer confidence is expected to fuel further market activity in 2026. However, the pace of growth is likely to remain moderate, shaped by ongoing regional differences and the broader economic outlook. For now, the UK housing market appears to be on the path to recovery, offering both opportunities and challenges for buyers and sellers alike as the year progresses.