Britain’s housing market appears to be regaining momentum in the opening weeks of 2026 after a slowdown that coincided with finance minister Rachel Reeves' November budget, according to property website Zoopla.
Zoopla reported on Thursday that buyer demand in early 2026 has returned to levels similar to those seen in early 2024. The platform also noted, however, that demand remains roughly 9% below the level recorded in early 2025 when many buyers accelerated transactions ahead of a temporary tax break for purchases.
"After a weak end to 2025, home buyer confidence is returning as mortgage rates ease and those who delayed decisions last year return to the market," Zoopla Executive Director Richard Donnell said.
The firm highlighted easing borrowing costs as a contributing factor. Average interest rates on a mortgage with an interest rate fixed for five years and a 75% loan to value have fallen to the lowest since 2022, Zoopla said.
On prices, Zoopla reported that house prices rose by an average of 1.2% over the past 12 months, while cautioning that the picture varies considerably by region. The largest gains were concentrated in the cheaper parts of the United Kingdom, according to the company.
Zoopla's observations sit alongside other signals of a post-budget recovery in the housing market. Property website Rightmove has said that asking prices rose by the most on record across the Christmas and New Year period, and the Royal Institution of Chartered Surveyors (RICS) recorded signs of improving expectations in December.
Data outside the property sector have also shown unexpected strength. January purchasing managers' data for businesses and official retail sales figures for December produced stronger than expected outturns, which have raised the prospect of faster-than-expected economic growth in early 2026, Zoopla noted.
The rebound in demand comes despite the budget measures introduced by the government in November. Reeves announced 26 billion pounds of tax rises in that budget, though Zoopla noted most of those measures are deferred. The article used a dollar-to-pound rate of $1 = 0.7248 pounds when referencing the budget's headline tax figure.
Context and implications
Zoopla's data imply a return of buyer activity driven by lower mortgage costs and by buyers who postponed decisions in 2025. Price gains remain modest on average but show sharper increases in lower-cost areas, which could influence regional housing dynamics and affordability debates.
At the same time, broader indicators of business activity and retail spending suggest the economy may be stronger in early 2026 than previously anticipated, a development that could feed back into housing demand and market sentiment.