According to Zoopla, although house price growth was lower at 1.1% compared to 1.9% last year, there were 9% more house moves due to stable mortgage rates and higher household income, bringing activity back in line with the 10-year average.
However, the rate of house price growth is significantly below the 10-year average of 3.8%.
Different pictures of house price growth
Zoopla said there was a North/South divide in price growth, driven by affordability.
House prices in the North West were recorded to have risen the fastest, by 2.9%, while outside of England, Northern Ireland had the strongest growth at 6.7%.
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Conversely, prices in Southern regions of England recorded falls, such as the 0.6% decline in London, where house prices and stamp duty costs are higher.
Higher property costs also hit coastal areas, as Zoopla recorded declines in areas where there is a surcharge tax on second homes.
First-time buyers behind busier market
Improvements to mortgage availability and affordability have resulted in first-time buyer numbers being on track to end the year 20% higher than last year.
First-time buyers made up 39% of house sales in 2025, the largest group of purchasers, followed by existing homeowners, accounting for a third, and cash buyers, who made up 21%. Landlords buying properties with a mortgage represented 7% of the market.
Zoopla said while mortgage policy changes meant first-time buyers could access larger loans, this did not mean they were buying more expensive homes.
In regional markets, new homeowners are buying homes worth up to 5% more compared to last year, but in London, they are going for properties 3% cheaper than previously.
House sales to level off in 2026
Looking ahead, Zoopla predicted a 1.5% growth in average UK house prices and said the new year would start off strong, owing to pent-up demand from people who held back before the Budget.
This will lead to house sales totalling 1.18 million in 2026 and the North/South divide in house price growth is expected to continue.
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.
“It is important that sellers remain realistic on pricing to secure sales in 2026, especially across Southern England.”
