First-time buyers drive home sales to three-year high in 2025, Zoopla predicts 2026 rebound

First-time buyers propelled UK housing transactions to their highest level in three years in 2025, according to Zoopla. The property portal said they accounted for about 39% of all transactions, up from 35% in 2024 and above the 25-year average. Cash buyers and landlords trimmed their shares, with 21% and 7% respectively, while existing homeowners with mortgages remained at 33%. Prices rose 1.1% across the country for the year, with a monthly gain of 0.04%.

Zoopla noted that sentiment was hit by the Budget in late 2024, with demand down 12% in the four weeks to the end of November and new sales down 9%. The data reflects completed transactions, which often take months to finalize, so the Budget's impact isn't captured in the 2025 data. Richard Donnell, Zoopla's executive director, said 2025 was a strong year for movers but the late-2024 Budget chilled activity; with the lull now over, buyers are returning to the market and a stronger-than-usual start to 2026 is expected. Affordability remains a constraint for first-time buyers and those trading up, which should keep price gains modest. Cheaper mortgages were a major driver of the first-time buyer resurgence, with average rates down more than 0.5 percentage points since early 2025; the typical two-year fix fell from 5.52% in January 2025 to about 4.93% today, while the cheapest rates on a 10% deposit loan run near 4%.

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Zoopla said total property sales across all buyers were on track to reach about 1.2 million in 2025, roughly 9% higher than 2024, with the total value of homes sold around £367 billion, the highest since 2022. Looking ahead, the portal forecast a 'stronger than usual' start to 2026 as buyers re-enter the market following sentiment improvements after the Budget nerves. However, Zoopla expects the overall number of sales to dip slightly next year to about 1.18 million. Prices, while still rising, are expected to advance more slowly, with a 1.5% gain projected in 2026 and an average of 2.1% from 2027 through 2029. Donnell emphasized price realism for sellers in 2026, noting that homeowners should understand both the value of their property and what they can afford before starting their searches.

The regional picture showed uneven progress in 2025. Northern Ireland posted the strongest annual price rise, up 6.7% to the end of November, while London registered a 0.6% decline. The South West and South East also trended downward. On a city level, Belfast surged 7.2%, while Liverpool rose 3.6% and Glasgow gained 3%. Bournemouth had the largest annual drop at 2.2%, with Cambridge and Aberdeen down 1.1% as 2025 drew to a close. In contrast to price movements, activity near prime properties drew attention elsewhere, with Rightmove reporting a spike in the number of top-end London homes being placed on the market in the week after the Budget, underscoring how sentiment and policy changes can shift supply dynamics even as overall volumes trend higher. Zoopla said the number of sales is expected to rise at the start of 2026, but buyers will likely proceed with caution as affordability continues to bind many households.