UK house price growth has slowed to 1.3% in the 12 months to January 2026, down from 1.8% recorded in the previous year, according to data from Zoopla. The figures indicate continued moderation in price increases despite higher levels of market activity across the country.
Regional variations
Northern Ireland recorded the highest annual growth rate at 8%, whilst performance across Great Britain showed significant regional disparities. The North West led mainland regions with prices rising 3.3% year on year, followed by Scotland at 2.8% and the North East at 2.5%.
London experienced a marginal decline, with average prices falling 0.2% compared to the previous year. Southern England remained the weakest regional market, with prices broadly flat over the 12-month period, though conditions have improved from the declines seen in the second half of 2025.
Higher growth rates were concentrated in more affordable areas where available housing stock has decreased compared to last year, reducing supply and supporting prices. In contrast, regions with stable or increased supply saw flat or weaker growth.
Supply and market activity
February is projected to record the highest number of new property listings for the month in a decade. Currently, 6% more homes are on the market compared to a year ago, with this figure expected to increase in coming months. The rise in supply is anticipated to provide buyers with greater choice and limit further price growth throughout the remainder of the year.
Richard Donnell, executive director at Zoopla, stated: “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.”
Mortgage market conditions
Average mortgage rates for new loans have reached their lowest level in four years, driven by lower base rates and increased competition between lenders. Both two-year and five-year fixed rate deals are now available below 4% for the first time since 2022.
Mortgage lenders have eased affordability criteria over the past year, currently assessing borrowers against a 6.5% mortgage rate compared to 8.5% a year ago. Based on these criteria and assuming a 20% deposit, 40% of homes listed on Zoopla can be purchased with mortgage costs lower than local rents, up from 25% last year.
In the North East, North West, and Scotland, more than half of homes for sale are cheaper to buy than rent when assessed at the 6.5% mortgage stress rate.
Outlook
Donnell commented: “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.”
Zoopla expects continued modest rates of price inflation through 2026, which should support healthy sales levels with variations across local markets. The combination of increased supply, improved mortgage affordability, and regional disparities is expected to characterise the UK property market throughout the year.
