First-time buyer numbers up 20% in 2025: Zoopla

Despite budget speculation hitting sales agreed in the last quarter of the year, the housing market will have its strongest year for sales in three years with 9% more home moves over 2025, the latest Zoopla data shows. 

Stability in mortgage rates and stronger growth in household incomes has encouraged more home moves over 2025. The increase in housing sales has been stronger than expected, with the market on track for 1.2m transactions over 2025. This is 9% higher than last year and in line with the 10-year average.

Although it’s positive to see more home moves, this is not translating into faster levels of house price growth. Average UK house prices now stand at £270,300, 1.1% higher than a year ago. This is lower than the 1.9% increase over 2024 and well below the 3.8% annual average over the last 10 years. 

The figures show that the market is locked in a north-south divide in price growth, driven by affordability and big variations in the cost of buying a home. House prices are rising fastest in the North West (2.9%) and Northern Ireland (6.7%) while prices are falling across southern regions of England and by up to 0.6% in London where house prices and stamp duty costs are highest.   

First-time buyers drive increase in sales 

Improvements in mortgage availability means first-time buyer numbers are on track to be 20% higher over 2025. First-time buyers will account for 39% of home purchases in 2025, and will be the largest group of home buyers followed by existing homeowners using a mortgage (33%), cash buyers (21%) and landlords buying with a mortgage (7%). 

While first-time buyers can borrow more, this doesn't mean they are buying higher value homes. Zoopla data on what first-time buyers are looking to buy shows that they are looking to spend more in regional markets, by up to 5% compared to a year ago. However, in London they are looking to buy homes that are 3% cheaper than a year ago, reflecting higher stamp duty costs with prices flat across southern England.

Forecasts for the housing market in 2026

Zoopla expects average UK house prices to increase by 1.5% over 2026 with a stronger than usual start to 2026 due to a release of pent-up demand as buyers return to the market after delaying decisions in the run-up to the budget. This will support housing sales, which are expected to total 1.18m over 2026. 

House prices are expected to continue to rise at an above-average pace, over 2.5%, across the Midlands, northern England, Scotland and Northern Ireland in 2026. Lower house prices in northern England and Scotland mean better buyer affordability and higher rate of house price inflation. Zoopla expects this north-south divide in price inflation to continue over 2026.

Average UK house prices are projected to be 1.5% higher over 2026 with an annual average increase of 2.1% a year between 2027 and 2029 as housing affordability continues to steadily reset and supports the number of sales.

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. 

“There remains plenty of homes for sale, which will boost buyer choice as we start the new year. Average UK house prices are projected to be 1.5% higher over 2026 with a continued divide between southern England and the rest of the country where affordability is better and buying costs are lower. 

“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.”