Pent-up demand and improving affordability are expected to drive a strong start to the 2026 housing market, according to Zoopla’s latest analysis – a shift that could support landlords considering portfolio growth. With price rises forecast to average 1.5 per cent next year, the platform expects buyers who paused decisions before the Budget to re-enter the market quickly, boosting transactions and stabilising values.
House price growth outlook for 2026
Zoopla’s projection of 1.5 per cent UK-wide house price growth in 2026 would help support sales volumes of around 1.18 million transactions. This suggests continued liquidity in the market and a more predictable environment for acquisitions and disposals.
The strongest price inflation is expected across the Midlands, northern England, Scotland and Northern Ireland – all regions where affordability remains far healthier than in the South. Average house prices here still sit well below southern levels, making yields more attractive and rental demand more resilient. Zoopla forecasts price increases above 2.5 per cent in these markets across 2026.
Richard Donnell, executive director at Zoopla, said the final months of 2025 were dampened by Budget speculation, but that momentum is returning: “Now the uncertainty has lifted, we expect a stronger than usual start to 2026 as buyers return to the market… Affordability remains a constraint for first-time buyers and those trading up which will keep prices in check.”
Regional trends: North-South divide strengthens
ONS housing data from 2024 already showed widening regional affordability gaps, and Zoopla’s figures reinforce this trajectory. Prices are rising fastest in the North West (2.9 per cent) and Northern Ireland (6.7 per cent), while southern England faces marginal declines – including -0.6 per cent in London, where higher stamp duty and elevated prices continue to suppress demand.
Drilling down to local markets, Zoopla identifies the UK’s strongest annual house price inflation in:
- Scottish Borders (TD): 4.7 per cent
- Oldham (OL): 4.4 per cent
- Kirkcaldy (KY): 4.2 per cent
- Falkirk (FK): 4.2 per cent
By contrast, several southern coastal areas are posting small annual declines, including Truro (TR, -2.4 per cent), Torquay (TQ, -1.9 per cent) and Bournemouth (BH, -1.8 per cent). Letting agents in these markets report that tighter second-home taxation and reduced hybrid working have softened buyer appetite – a trend landlords have noted since mid-2024.
Despite this cooling, the UK is still on track for its strongest year of sales in three years. Zoopla’s House Price Index shows 2025 transactions expected to hit 1.2 million, around nine per cent higher than 2024 and close to the 10-year average.
Buyer demand, mortgage availability and implications for landlords
Mortgage stability has played a key role in reigniting buyer confidence. UK Finance data confirms lenders have broadened product choice and reduced rates during 2025, prompting a 20 per cent projected rise in first-time buyer numbers compared with last year. First-time buyers will make up around 39 per cent of all purchases in 2025, followed by existing movers (33 per cent), cash buyers (21 per cent) and landlords using mortgages (7 per cent).
Landlords may find opportunities in regional markets where buyer budgets have increased. Zoopla notes first-time buyers outside London are now looking to spend up to five per cent more than last year. In the capital, however, first-time buyer budgets have dropped three per cent – a sign of stamp duty pressures and stretched affordability.
Average UK house prices currently stand at £270,300, just 1.1 per cent higher than a year earlier – slower than the 1.9 per cent uplift recorded in 2024 and well below the 10-year annual average of 3.8 per cent. This moderate growth pattern, combined with improving financing conditions, means 2026 may offer landlords a more stable acquisition window than the previous three years of volatility.
Editor’s view
Steadier house price growth, better mortgage availability and healthier regional performance all suggest that 2026 could be a favourable year for strategic landlords. While southern markets continue to cool, the Midlands, North and devolved nations offer stronger yield prospects and lower entry costs. The biggest unknown is whether affordability gains will persist long enough to support sustained buyer and renter demand.
Author: Editorial team – UK landlord & buy-to-let news, policy, and finance.
Published: 23 December 2025
Sources: Zoopla House Price Index, ONS Housing Data, UK Finance
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