UK Housing Market Update — Zoopla House Price Index: December 2025
The latest Zoopla House Price Index (HPI) shows the UK housing market ending 2025 on a steady note, with strong buyer demand and transaction volumes, but relatively modest price growth compared with previous years. Here’s everything you need to know.
Key Market Takeaways
- Strong sales activity — Around 1.2 million homes sold in 2025, the highest number for three years.
- Modest price growth — UK house price inflation has slowed to just 1.1% over 2025, down from 1.9% in 2024.
- Affordability remains a constraint — First‑time buyers are a major driver of sales, but buying costs continue to limit how much they can bid.
- Forecast for 2026 — Zoopla projects house prices to rise ~1.5% next year, thanks to stable mortgage rates and pent‑up demand.
What’s Driving the Market?
It’s a tale of activity over acceleration. Although more homes are being sold and there are plenty of listings — especially in regional markets — overall price growth is being dampened by the cost of buying a home.
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Mortgage affordability has improved slightly thanks to steadier borrowing costs and rising incomes in 2025, encouraging more moves. First‑time buyers are now 39% of all sales, the highest share seen in recent years.
Regional Differences
The UK market is uneven:
- Northern and Scottish markets are showing stronger price rises, with areas like the North West and Scottish Borders recording above‑average inflation.
- Southern regions, especially parts of southern England and coastal towns, have slightly falling or flat prices, largely due to higher costs and reduced affordability.
- London prices remain softer, particularly in inner and central zones, as higher costs and taxes push buyers to suburbs or regional cities.
- This regional divide looks set to continue into 2026.
Looking Ahead to 2026
The outlook holds a cautiously optimistic tone:
✔️ Sales volumes are expected to remain close to long‑term averages.
✔️ House prices are forecast to grow modestly — around 1.5% next year.
✔️ Affordability pressures will continue to temper price jumps, especially in high‑cost areas.
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Zoopla also highlights that current prices are “fairly valued” relative to incomes and mortgage rates, offering some room for growth if economic conditions improve.
What This Means for Buyers and Sellers
Buyers
- Activity remains strong, giving more choice.
- First‑time buyers are particularly active, but caution is still needed on budgets.
Sellers
- Price expectations should be realistic — modest growth means homes need competitive pricing.
- High demand in regional markets could still support quicker sales if priced right.
Agents
- Expect higher transaction volumes than recent years.
- Guiding clients on pricing and regional trends will be key to securing sales.