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Britain's housing market is regaining momentum after a slowdown ahead of the November budget, with Zoopla reporting buyer interest in early 2026 similar to early 2024 but slightly below last year's levels. Mortgage rates have eased to the lowest since 2022, boosting confidence among buyers who had delayed decisions. House prices rose by 1.2% over the past year, especially in affordable regions. Rightmove and RICS data indicate recovery in asking prices and market expectations. Broader economic indicators, including strong retail sales and purchasing managers data, support prospects of faster early-year growth.
Britain's housing market has picked up momentum since the start of the year following a slowdown in the months leading to Finance Minister Rachel Reeves November budget, according to property portal Zoopla. Advertisement
Zoopla noted that buyer interest in early 2026 is roughly at the same level as in early 2024, although it remains about 9% lower than the start of last year, when many buyers were rushing to complete transactions before a temporary tax incentive expired.
Richard Donnell, Zoopla's Executive Director, indicated that homebuyer confidence is returning as mortgage rates decline, with many who had postponed decisions last year now re-entering the market. Average mortgage rates for five-year fixed loans at 75% loan-to-value have dropped to their lowest level since 2022, according to Zoopla.
Over the past 12 months, house prices have increased by an average of 1.2%, with notable regional differences. The largest price rises were observed in more affordable areas of the country. Other property platforms also reported signs of recovery. Rightmove highlighted that asking prices for homes saw the highest growth on record during the Christmas and New Year period, while the Royal Institution of Chartered Surveyors observed improving expectations toward the end of last year.
Economic indicators outside the housing sector support this positive outlook. Early 2026 purchasing managers data and official retail sales figures for December surpassed expectations, suggesting potential faster economic growth at the start of the year.
Although Reeves November budget introduced tax measures totaling GBP 26 billion (USD 36 billion), most of these increases are scheduled for the future, providing some stability for the housing market in the near term.
Source Reuters
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