First-time buyers lift home moves to three-year high as price growth cools

The housing market is heading for its busiest year in three years, with sales set to reach 1.2 million in 2025, even as price growth continues to slow down, data reveals.

According to Zoopla, despite a drop in activity during the final quarter because of the recent Budget speculation, the number of completed moves is forecast to be 9% higher than last year.

That places it broadly in line with the long-term average.

Stable mortgage rates and stronger household income growth have also helped keep transactions moving, yet prices are rising at a far more modest pace.

Buyers held back

Richard Donnell, executive Director at Zoopla, said: “2025 has been a strong year for home moves but the Budget hit activity in the final months of the year and saw many moving decisions put on hold.

“Now the uncertainty has lifted, we expect a stronger than usual start to 2026 as buyers return to the market.

“The appetite to move home remains strong but affordability remains a constraint for those buying their first home or looking to trade-up to a larger home which will keep prices in check.”

He added: “There remains plenty of homes for sale, which will boost buyer choice as we start the new year.

“It is important that sellers remain realistic on pricing to secure sales in 2026, especially across southern England.

“Homeowners looking to move in the year ahead should understand the value of their home and what they can afford before starting their property search.”

Houses prices up in 2025

Average UK house prices are now £270,300, up 1.1% over the past year which is lower than the 1.9% rise in 2024 but well below the 3.8% annual average seen over the past decade.

Growth is strongest in Northern Ireland, where prices are up 6.7%, followed by the North West at 2.9%.

However, prices across southern England are slipping, with London recording falls of up to -0.6% as higher house prices and stamp duty costs weigh on demand.

The fastest growth has been seen in the Scottish Borders, where prices are up 4.7%, alongside Oldham at 4.4%, Kirkcaldy at 4.2% and Falkirk also at 4.2%.

Coastal locations in the south have seen declines, including Truro at -2.4%, Torquay at -1.9% and Bournemouth at -1.8%, reflecting weaker second-home demand and a return to office working.

Landlords account for 7% of buyers

Zoopla says that first-time buyers have played a central role in lifting activity with improved access to mortgages.

That should see their numbers being 20% higher over 2025, accounting for 39% of all purchases.

Existing homeowners using a mortgage represent 33% of sales, followed by cash buyers at 21%, while landlords buying with finance make up 7%.

The data shows that borrowing power has not pushed first-time buyers towards more expensive properties and they are spending up to 5% more than a year ago.

In London, budgets have fallen by around 3%, as higher transaction taxes and flat prices constrain choices.

House prices to rise in 2026

Looking ahead, Zoopla expects average house prices to rise by 1.5% in 2026, supported by a stronger-than-usual start to the year as pent-up demand returns following the Budget.

Sales are forecast to ease slightly to 1.18 million, around 2% lower than 2025, yet still historically robust.

Growth is expected to remain strongest across the Midlands, northern England, Scotland and Northern Ireland, where affordability is better and buying costs are lower.

Annual price increases above 2.5% are forecast in those regions, while the north-south divide is set to persist.