The UK housing market is on track for its busiest year since 2022, with home sales expected to reach 1.2 million in 2025. This increase in activity is largely driven by first-time buyers benefiting from improved mortgage access, even as house price growth moderates to its slowest pace in over a decade. For landlords, these trends signal a dynamic market with implications for tenant demand and property investment strategies.

Market Activity Rebounds Despite Late-Year Slowdown

Data from Zoopla indicates that completed home moves in 2025 are forecast to be 9% higher than in 2024, aligning with the long-term average for the UK housing market. Although activity dipped in the final quarter due to uncertainty surrounding the recent Budget, stable mortgage rates and stronger household income growth have supported sustained transaction levels throughout the year.

Richard Donnell, Executive Director at Zoopla, noted that the Budget-related pause in moving decisions is expected to reverse early in 2026, with a stronger than usual start as buyers return to the market. However, affordability constraints remain a significant factor, particularly for first-time buyers and those seeking to trade up, which is likely to keep price increases modest.

House Price Growth Moderates Across the UK

The average UK house price currently stands at £270,300, reflecting a 1.1% increase over the past year. This growth rate is lower than the 1.9% rise seen in 2024 and substantially below the 3.8% annual average recorded over the last decade. Regional disparities are notable, with Northern Ireland experiencing the strongest growth at 6.7%, followed by the North West at 2.9%.

Conversely, prices in southern England are generally declining, with London seeing falls of up to 0.6%. Higher house prices combined with stamp duty costs are dampening demand in these areas. Coastal southern locations such as Truro, Torquay, and Bournemouth have also seen price declines, reflecting weaker second-home demand and a shift back to office working.

First-time Buyers and Their Impact on Market Dynamics

First-time buyers have been instrumental in driving the increased transaction volume in 2025, with their numbers expected to be 20% higher than the previous year. They now account for 39% of all property purchases, supported by improved mortgage accessibility. Existing homeowners using mortgages represent 33% of sales, cash buyers 21%, and landlords purchasing with finance 7%.

Importantly, the data suggests that increased borrowing power has not pushed first-time buyers into significantly more expensive properties; their budgets have risen by up to 5% compared to last year. In London, however, budgets have decreased by approximately 3%, constrained by higher transaction taxes and stagnant prices.

Implications for Landlords and Letting Agents

The rise in first-time buyer activity and the moderation in price growth have several implications for landlords and letting agents. Increased home purchases by first-time buyers may reduce rental demand in certain areas, particularly where affordability improves. However, the sustained transaction levels and regional price growth in the Midlands, northern England, Scotland, and Northern Ireland suggest ongoing opportunities for investment in these regions.

Landlords should note that the north-south divide in price growth and affordability is expected to persist, with annual price increases above 2.5% forecast in more affordable regions. This could influence rental yields and tenant demand patterns, making regional market knowledge increasingly important for property management and acquisition strategies.

Outlook for 2026 and Strategic Considerations

Looking ahead, Zoopla forecasts average house price growth of 1.5% in 2026, supported by pent-up demand following the Budget. Sales volumes are expected to ease slightly to 1.18 million but remain historically robust. Sellers, particularly in southern England, are advised to maintain realistic pricing to secure sales in the coming year.

For landlords, understanding local market conditions and affordability trends will be key to navigating the evolving landscape. Awareness of buyer profiles, including the significant role of first-time buyers, can inform rental pricing and marketing strategies to attract and retain tenants.

Upcoming Support for Landlords

The Landlord Association (TLA) is launching a new Trusted Partners Hub in Q1 2026. This platform will feature verified and approved service providers selected to support landlords, tenants, and property management businesses. Legal, trades, insurance, financial, mortgage, tenant screening, and other service providers interested in joining the hub are invited to register their interest at landlordassociation.org.uk/become-a-tla-service-partner/.