Home buyer confidence in the UK is starting to improve as mortgage rates gradually fall, bringing more people back into the property market. While this is a positive sign, overall activity remains below the exceptionally strong start seen at the beginning of last year.
The latest data from Zoopla’s UK House Price Index shows that buyer demand has rebounded after a subdued finish to 2025. The slowdown at the end of last year was largely driven by uncertainty around the Autumn Budget, which caused many households to put their moving plans on hold.
Zoopla reports that current levels of activity are broadly in line with early 2024. However, they remain around 9% lower than the unusually high buyer activity recorded at the start of 2025, when the market was particularly competitive.
Richard Donnell, Executive Director at Zoopla, notes that home buyers who delayed decisions last year are now gradually returning to the market. “Confidence is slowly coming back as mortgage rates ease,” he said, “and more buyers are feeling ready to resume their property searches.”
He added that the market remains varied across the country. “Conditions differ from region to region, and much depends on the choice available to buyers in each area,” Donnell explained.
Lower mortgage rates are playing a key role in restoring confidence. Competition among lenders has pushed the average five-year fixed mortgage at 75% LTV down to 4%, marking the lowest level seen since 2022. This has made borrowing more affordable for many households.
However, despite improved sentiment, the housing market today is very different from a year ago. The number of homes for sale has increased by 6% compared with 2025, representing the largest supply of properties seen in the last eight years.
This surge in available homes is easing the pressure on buyers. With more choice, buyers can afford to be more selective, while sellers need to focus on sensible pricing and ensuring properties are well presented to attract interest.
Across the UK, house prices rose by 1.2% over 2025, adding approximately £3,200 to the average property value, which reached £269,800 by the year’s end.
Price growth has been strongest in more affordable regions, particularly in the Midlands, northern England, Scotland, and Northern Ireland. In these areas, property values have increased up to four times faster than the national average.
By contrast, prices in the South East and South West fell slightly, dropping by around 0.1%. In southern England, higher transaction costs combined with a larger pool of available homes are making buyers more cautious in their decision-making.
London has also seen a notable increase in properties on the market compared with the previous year. This greater supply is creating a buyers’ market in the capital, which has put downward pressure on prices.
The wider range of homes available is also encouraging buyers to consider a broader selection of areas. With more options, buyers can prioritise factors such as property condition, location, and affordability, rather than feeling forced to compete in a tight market.
Despite the changes, demand is gradually strengthening. Buyers who postponed moves last year are now more confident, particularly as mortgage rates remain lower than at the end of 2025.
Looking ahead, the combination of falling mortgage costs and increased housing options is likely to support further market activity. Sellers, meanwhile, must adapt to the evolving landscape by presenting their properties attractively and pricing them competitively to capture buyer interest.
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