The UK housing market is showing signs of resilience as agreed sales edge ahead of last year’s levels despite a 10% decline in overall buyer demand, according to the latest Zoopla House Price Index.
Agreed sales are running 1% ahead of the previous year, suggesting that whilst discretionary buyers have stepped back in response to higher borrowing costs and economic uncertainty, households with a clear need to move continue to transact.
The data shows housing stock levels have increased by 3.4% year-on-year, providing buyers with greater choice. UK house price inflation has risen to 1.5%, with the strongest growth concentrated in more affordable markets across northern England, Scotland and Wales, where price growth ranges from 2% to 3.6%.
First-time buyer activity
First-time buyer budgets have risen by 4.3%, indicating continued confidence among committed movers. Iain McKenzie, CEO of The Guild of Property Professionals, said: “While wider UK house price growth remains relatively modest at 1.5%, the fact that first-time buyer budgets have risen by 4.3% highlights continued confidence among committed movers, especially those focused on long-term lifestyle needs rather than short-term market fluctuations.”
James Nightingall of HomeFinder AI noted: “We are seeing first-time buyers become far more strategic and long-term focused. Many would rather stretch an extra £10,000–£20,000 today for better transport links, green space or future resale appeal than compromise and move again in a few years.”
Regional variations
London has seen sales agreed increase by 8% year-on-year, despite headline house price growth remaining largely flat. Marc von Grundherr, director of Benham and Reeves, said: “London continues to demonstrate remarkable resilience and while headline house price growth across the capital remains largely flat, the fact that sales agreed are up 8% year-on-year tells a very different story beneath the surface.”
In contrast, affordability remains stretched across southern England. Nathan Emerson, CEO of Propertymark, stated: “Higher borrowing costs and wider economic uncertainty continue to present challenges for many households, particularly across southern England, where affordability remains stretched.”
The increased stock levels, which have reached their highest point in over a decade, are giving buyers greater negotiating power. Jeremy Leaf, a north London estate agent, said: “Those motivated buyers on the lookout for a new home are taking advantage of their negotiating position, particularly given the backdrop of ongoing concerns about the Iran war and knock-on effects on the cost of living and mortgage rates.”
This shift in market dynamics comes as the property industry continues to address operational challenges in transaction processes, with transactions taking longer and sellers more exposed to renegotiation or deals falling through.
Market outlook
Tom Bill, head of UK residential research at Knight Frank, said: “Higher mortgage rates mean the UK housing market will come under gradual and sustained pressure this year rather produce a cliff-edge moment. Buyers sitting on mortgage offers that pre-date the Middle East conflict feel a sense of urgency to act while others have seen their spending power eroded.”
Mortgage approvals are reportedly improving, with homes selling faster than earlier in the year as lenders become more competitive and mortgage rates begin to stabilise. Combined with inflation easing and interest rates being held steady, these factors are supporting confidence across the market.
The data suggests the market remains active despite softer demand, although growing supply and affordability pressures are making pricing more competitive. Sellers who understand their local market and price realistically continue to attract interest, whilst buyers benefit from greater choice and negotiating power in the current environment.