February is on track to record the highest number of new property listings for a decade as improving mortgage conditions boost market momentum.
The latest House Price Index from Zoopla reveals that the number of homes for sale is currently 6% higher than a year ago, reflecting renewed seller confidence and stronger levels of activity as the spring market approaches.
At the same time, average mortgage rates for new loans have fallen to their lowest level in four years, with both 2- and 5-year fixed deals now priced below 4% for the first time since 2022. Lenders have also eased affordability stress testing, typically assessing borrowers at 6.5%, down from 8.5% a year ago.
As a result, 40% of homes listed on Zoopla are now cheaper to buy with a mortgage than to rent locally, assuming a 20% deposit – up from 25% last year.
Despite the uptick in activity, house price growth remains contained at 1.3% in the 12 months to January.
Northern Ireland is seeing the strongest annual growth at 8%, while the North West leads Great Britain at 3.3%. In contrast, London prices are down 0.2% year-on-year.
MORE STABLE MARKET
Richard Donnell, executive director at Zoopla, said: “Despite improved levels of market activity, subdued house price inflation is good news for buyers and sellers and represents a more stable market. More sellers putting their home on the market shows a strong desire to move home.”
He added: “Lower mortgage rates and improved affordability of mortgages means now could very well be the best time to buy a home in recent years, especially for first time buyers with more homes available to buy for less than the cost of renting.
“We expect continued modest rates of price inflation over 2026 which will support healthy levels of sales with some wide variations across local markets. Sellers need to seek the advice of local agents to get the right strategy for their home.”
AFFORDABILITY TURNING POINT
Adrian Moloney, group lending distribution director at Precise, said: “Today’s figures reinforce the affordability turning point we’ve been anticipating. Falling mortgage rates, easing stress tests and greater lender flexibility are shifting the buy-versus-rent equation in many parts of the country.
“For a growing number of tenants, particularly outside London, the monthly cost comparison is no longer the barrier it once was.”
ROBUST FOUNDATIONS
He added: “We are still in the early stages of this shift, but the foundations are more robust than a short-term rate movement.
“Wage growth, stabilising house prices and increased competition among lenders are collectively improving borrowing power. That said, affordability remains finely balanced and confidence will depend on continued economic stability.
“Those first-time buyers who have already built a deposit but were waiting for repayment costs to become more manageable are likely to move first. Increased flexibility around mortgage terms, loan-to-value ratios and a more holistic view of income are making a tangible difference.
For landlords, the picture is more nuanced. While some local markets may see tenant demand soften as renters transition into homeownership, the fundamentals of the private rented sector remain strong.”
EXCELLENT OPPORTUNITIES
Enzo Mora, CEO and founder of The Mortgage Brain, said: “There’s a flurry of good news for home buyers on the horizon with mortgage interest rates at their lowest since before Liz Truss’s disastrous mini budget in 2022, greatly improved affordability and stress testing from lenders and subdued house price growth.
“We have seen a sharp rise in renters reassessing their ability to buy their first homes as mortgages become cheaper than renting in many parts of the UK.
“We need to get the message out that now is an excellent time to take advantage of opportunities in the property market wherever buyers are on the ladder. As inflation edges towards the government’s 2% target, industry is hopefully that we will see the first bank rate cut of 2026, which will add even more to confidence levels.”
CHANGING WORKING PATTERNS
Nathan Emerson, CEO of Propertymark, added: “After years of cost-of-living pressures and higher interest rates, 2026 is showing signs of greater stability. With inflation dipping down earlier this month, it is hoped the Bank of England may have the confidence to bring the base rate down further when they next meet.
“At the same time, stronger price growth in parts of the UK outside London reflects changing working patterns and affordability considerations, as more people reassess where they can achieve a good standard of living.”
PRICES KEPT IN CHECK
And Tom Bill, head of UK residential research at Knight Frank, said: “House prices are being kept in check by rising supply as plans delayed by last year’s Budget are activated and more landlords attempt to sell due to red tape. Buyers are more circumspect than sellers but further mortgage rate declines and increasingly realistic asking prices will support transactions this spring.
“The political noise hasn’t cut through to the mainstream housing market yet but we expect plans will be put on hold when the starting gun is fired on the Labour leadership race.”
IMPROVING RATES
Sarah Cartlidge, branch manager at Fraser Reeves, added: “We’re seeing multiple factors coming together, including improving mortgage rates and easing lending criteria to make a more healthy and confident sales market recently.
“There are plenty of new properties being listed since January and this continues to be the case as we move into Spring.”
