The UK housing market is experiencing its busiest year since 2022, with home sales forecast to reach 1.2 million in 2025. This increase in transactions is largely driven by first-time buyers benefiting from improved mortgage access, even as house price growth moderates to more sustainable levels. For landlords, these trends signal a stable market environment with steady demand and evolving regional price dynamics to consider.

Housing Market Activity Rebounds in 2025

According to data from Zoopla, completed home moves in 2025 are expected to be 9% higher than in 2024, aligning with the long-term average for the market. Despite a slowdown in activity during the final quarter due to Budget-related uncertainty, the overall year has seen strong momentum. Stable mortgage rates combined with stronger household income growth have supported this rise in transactions, though house prices have increased at a more modest pace compared to previous years.

Richard Donnell, Executive Director at Zoopla, noted that while the Budget caused some buyers to delay decisions, the market is poised for a robust start to 2026 as uncertainty lifts. He emphasised that affordability remains a key constraint, particularly for first-time buyers and those seeking to trade up to larger homes. This affordability pressure is expected to keep price growth in check, especially in southern England where prices are currently softening.

Regional Variations in House Price Growth

Average UK house prices now stand at £270,300, reflecting a 1.1% increase over the past year. This growth rate is lower than the 1.9% rise recorded in 2024 and significantly below the 3.8% annual average seen over the last decade. Regional disparities are pronounced: Northern Ireland leads with a 6.7% increase, followed by the North West at 2.9%. In contrast, parts of southern England, including London, have experienced slight price declines, with London prices falling by up to 0.6%. These declines are attributed to higher house prices and stamp duty costs dampening demand.

Notably, the Scottish Borders have seen the fastest growth at 4.7%, alongside strong increases in Oldham (4.4%), Kirkcaldy (4.2%), and Falkirk (4.2%). Coastal southern locations such as Truro, Torquay, and Bournemouth have recorded price falls between 1.8% and 2.4%, reflecting weaker second-home demand and a shift back to office working arrangements.

First-time Buyers and Buyer Composition

First-time buyers have been central to the increased market activity, with their numbers expected to be 20% higher in 2025 compared to the previous year. They now account for 39% of all property purchases. Existing homeowners using mortgages represent 33% of sales, cash buyers 21%, and landlords purchasing with finance make up 7%.

Importantly for landlords, the data indicates that first-time buyers have not been pushed towards significantly more expensive properties despite increased borrowing power, with average spending rising by up to 5% year-on-year. In London, however, budgets have decreased by around 3%, constrained by higher transaction taxes and stagnant prices.

Implications for Landlords and Letting Agents

The steady increase in home sales driven by first-time buyers suggests a continued demand for rental properties, as some potential buyers remain priced out of the market. Landlords should monitor regional price trends carefully, as areas with stronger affordability and price growth—such as Northern Ireland, the Midlands, and parts of northern England—may offer more stable rental yields and tenant demand.

The modest house price growth and high transaction volumes also imply a balanced market where rental demand remains resilient but landlords need to be mindful of pricing strategies and tenant affordability. The ongoing north-south divide in price growth highlights the importance of local market knowledge for effective property management and investment decisions.

Outlook for 2026

Looking ahead, Zoopla forecasts that average house prices will rise by approximately 1.5% in 2026, supported by a strong start to the year as pent-up demand returns following the Budget. Sales volumes are expected to ease slightly to 1.18 million, remaining historically robust. Price growth is anticipated to be strongest in the Midlands, northern England, Scotland, and Northern Ireland, where affordability and lower buying costs prevail. Annual increases above 2.5% are forecast in these regions, while the north-south price gap is likely to persist.

TLA Update

The Landlord Association (TLA) is launching a new Trusted Partners Hub in the first quarter of 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 https://landlordassociation.org.uk/become-a-tla-service-partner/.