Home buyers return as mortgage rates fall and housing choice widens

Home buyer confidence is improving as mortgage costs ease, bringing more people back into the housing market, although activity remains below last year’s opening pace.

The latest UK House Price Index from Zoopla shows buyer demand has recovered after a subdued end to 2025.

That’s when uncertainty around the Autumn Budget caused many households to pause their moving plans.

The property platform says that activity levels are broadly in line with early 2024 but sit 9% lower than the unusually strong start seen last year.

‘Buyer confidence is returning’

Richard Donnell, executive director at Zoopla, said: “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.”

He added: “Market conditions vary across the country and are defined by the level of choice for home buyers.”

Mortgage competition helps

Competition among mortgage lenders and falling rates are helping to boost buyer sentiment.

The average five-year fixed mortgage rate at 75% LTV has dropped to 4%, the lowest level since 2022.

However, buyers are returning to a market that looks very different from a year ago.

The number of homes for sale is 6% higher than last year, with agents marketing the largest volume of properties seen in eight years.

Increased choice is easing pressure between buyers and placing more focus on sensible pricing and strong presentation from sellers.

House prices up

Across the UK, house prices rose by 1.2% over 2025, adding around £3,200 to the average value, which stood at £269,800 at the end of the year.

Growth has been much stronger in more affordable areas of the Midlands, northern England, Scotland and Northern Ireland, where prices have risen up to four times faster than the national average.

Prices slipped by -0.1% across the South East and South West.

In southern England, higher transaction costs and a larger pool of homes for sale are making buyers more cautious.

London now has many more properties on the market than a year ago, reinforcing a buyers’ market in the capital and putting downward pressure on prices.