Residential property prices in the UK have increased by 1.3% over the past 12 months, according to the latest Zoopla House Price Index, with significant regional variation and a notable rise in both buyer and seller activity.
London recorded a 0.2% annual price decline, whilst the North West saw growth of 3.3%. Northern Ireland experienced the strongest performance with an 8% annual increase.
Zoopla’s data indicates that 40% of homes currently for sale are now cheaper to purchase with a mortgage than to rent, a shift that has particularly affected first-time buyer activity.
Market activity and supply
Simon Gerrard, chairman of Martyn Gerrard Estate Agents, reported that first-time buyers accounted for over half of transactions in January. He attributed increased supply levels to landlords exiting the market ahead of the Renters Rights Bill, due to take effect in May.
“Increased seller confidence may have brought more houses to market, but the real cause in the rise in supply is from landlords selling up,” Gerrard stated, adding that this trend is expected to continue for several months.
Tom Bill, head of UK residential research at Knight Frank, noted that rising supply stems from plans delayed by last year’s Budget and landlords selling due to regulatory requirements. He indicated that buyers remain more cautious than sellers, though declining mortgage rates and adjusted asking prices are expected to support spring transactions.
Affordability and mortgage rates
Nathan Emerson, CEO of Propertymark, highlighted that more competitive mortgage rates and improved affordability assessments are enabling increased market participation after years of cost-of-living pressures and elevated interest rates.
Enzo Mora, CEO of The Mortgage Brain, reported that mortgage interest rates have reached their lowest levels since before the September 2022 mini-budget, alongside improved affordability and stress testing from lenders.
Emerson cautioned that rising house prices are not sustainable without increased supply of affordable homes, stating that meeting housing delivery targets will be necessary to ensure long-term affordability.
Regional patterns
Industry figures noted that stronger price growth outside London reflects changing working patterns and affordability considerations, as buyers reassess location choices based on living standards.
Nigel Bishop, founder of Recoco Property Search, observed that increased seller activity since the beginning of 2026 has created a more varied property selection in parts of the UK, potentially strengthening buyer negotiating positions despite modest price increases.
Sarah Cartlidge, branch manager at Fraser Reeves, confirmed that improving mortgage rates and easing lending criteria have contributed to increased confidence, with property listings continuing to rise into spring.
Market participants anticipate further Bank of England base rate reductions following recent inflation data, which could support continued transaction activity throughout 2026.
