According to Zoopla, homeownership has become more affordable because of easing mortgage rates and affordability assessments.
Lenders are stress testing borrowers at a rate of 6.5% on average, lower than the typical rate of 8.5% last year. This has made a larger share of homes cheaper to buy than rent, assuming a 20% deposit is put down.
Conversely, in some regions, the lower stress rate has made more than half of homes cheaper to rent than buy, such as the North East, North West and Scotland.
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Zoopla housing market report projects 10-year high for listings
Zoopla said February was on track to see the highest number of new home listings in a decade, giving prospective buyers more choice. There are 6% more homes for sale than a year ago, and Zoopla expects this to keep rising in the coming months and subdue house price growth.
Although Zoopla said there was more activity in the market, house price growth in the 12 months to January was recorded at 1.3%, down from 1.8% over the same period a year earlier.
Northern Ireland has the fastest rate of price growth at 8%, and within Great Britain, the North East has the strongest growth, with house prices up 3.3% year-on-year. The region is followed by Scotland, with a 2.8% growth, and the North East at 2.5%. By contrast, prices in London are 2% down.
Zoopla found there were fewer homes for sale in more affordable regions, which was limiting buyer choice and supporting house price growth. In other regions, price growth is the same or weaker than a year ago. In Southern England, average prices have stayed flat, making this the softest market. However, Zoopla noted this was an improvement on the price falls seen in the second half of 2025.
Richard Donnell, executive director at Zoopla, said: “Despite improved levels of market activity, subdued house price inflation is good news for buyers and sellers and represents a more stable market. More sellers putting their home on the market shows a strong desire to move home.
“Lower mortgage rates and improved affordability of mortgages means now could very well be the best time to buy a home in recent years, especially for first-time buyers with more homes available to buy for less than the cost of renting.”
He added: “We expect continued modest rates of price inflation over 2026, which will support healthy levels of sales, with some wide variations across local markets. Sellers need to seek the advice of local agents to get the right strategy for their home.”
Barriers to homeownership still exist
Alastair Douglas, CEO of TotallyMoney, said lower rates and more homes was good news, but for many young people, the challenge was “getting a mortgage in the first place”.
He added: “Deposits are a huge hurdle, and saving enough has never been harder. High rents and the cost-of-living crisis are making it hard to put money away each month, and with youth unemployment at 16.1% and job vacancies at their lowest since the pandemic, some can’t even get started. And if you’re struggling to find work and renting, it’ll also be harder to build the kind of credit history that lenders want to see.
“Add a student loan crisis to the mix, with high interest rates and frozen repayment thresholds, and it’s clear that homeownership is becoming a luxury for those who can lean on the Bank of Mum and Dad. The reality is that those from tougher backgrounds might find themselves completely locked out of buying a home.”
Nathan Emerson, CEO of Propertymark, said it was “encouraging” to see renewed confidence in the housing market.
However, he said: “Rising house prices are not sustainable without a significant boost to the supply of genuinely affordable homes.
“Meeting housing delivery targets will be crucial to ensuring long-term affordability and preventing buyers from being priced out of areas seen as more attainable.”
Zoopla house price report indicates “an affordability turning point”
Adrian Moloney, group lending distribution director at Precise, said the figures reinforced the “affordability turning point we’ve been anticipating”.
He added: “We are still in the early stages of this shift, but the foundations are more robust than a short-term rate movement. That said, affordability remains finely balanced and confidence will depend on continued economic stability.”
Moloney said first-time buyers who already had a deposit saved would be the first to act, as changing mortgage rules were “making a tangible difference”. However, he said the picture was more nuanced for landlords.
Moloney added: “While some local markets may see tenant demand soften as renters transition into homeownership, the fundamentals of the private rented sector remain strong. Our latest Landlord Leaders research shows 62% of landlords are optimistic about the future and 28% are committed to growing their portfolios long term. Professionalisation continues to reshape the sector, with many adapting their business models to focus on long-term resilience.
“Ultimately, demand for housing – whether rented or owned – remains structural. Stability in rates and policy will be key to ensuring both aspiring buyers and landlords can plan with confidence.”
For continued reporting on house price growth around the UK, please refer to Mortgage Solutions‘ latest articles.
