As we enter Q2 2026, the UK housing market is currently navigating a period of cautious stability. According to Zoopla’s latest House Price Index, UK house price growth has remained steady in the year to March, with a 1.3% year-on-year increase.
While the broader economic landscape presents new challenges for sellers and buyers alike, Zoopla has highlighted that the market is “becoming more reliant on a smaller pool of committed buyers” rather than the broad-based activity seen in previous years.
Property Prices Up, Sales Volume Down
Although average property values have risen in the year to March, the gap between buyer demand and sales agreed is widening.
Zoopla’s March HPI shows buyer demand is now 13% lower than the same period last year, as buyers take a more cautious approach amid the real potential for rising interest rates.
The drop in buyer interest has yet to translate into a significant decline in sales, with only a 2% decrease in March.
The online property portal explained: “These “serious movers” – who have mortgage finance in place and are driven by a clear desire to move – are continuing to support sales levels as more earlier stage movers adopt a ‘wait and see’ approach.”
Rising Cost of Borrowing
Unsurprisingly, interest rates remain a focal point for the housing market as the cost of borrowing continues to climb. Amidst the instability of the war in the Middle East, the Bank of England (BoE) has hit the pause button, holding rates steady in March. This cautious approach allows the Bank to assess the conflict’s impact on UK inflation before its next decision at the end of April.
Yet, despite the BoE’s decision to hold interest rates, in March alone, average mortgage rates climbed by approximately 0.4%. As affordability comes into question, many first-time buyers are adopting a ‘wait and see’ approach to their house hunt.
More Choice for Buyers
Interestingly, while house prices remain steady, the number of homes for sale is 6% higher than a year ago, as sellers who have a clear intention to move set aside external factors and press forward with their plans.
Zoopla explains, “A sizeable share of activity is coming from less mortgage-rate sensitive buyers. Around a quarter of sales are cash purchases, while many existing homeowners have built up a sizable equity position in their homes.”
What’s Next For House Prices?
With all eyes on the trajectory of interest rates, current house price growth remains stable. Zoopla suggest that if mortgage rates were to see significant rises, the current dip in demand would likely translate into fewer sales later this year.
So far, the 2026 housing market is currently defined by a “wait and see” approach and while activity remains resilient, the outlook is starting to shift from a wider, across-the-board recovery to one driven by a smaller, more committed group of buyers.
What This Means for Landlords
For landlords, the current “wait and see” environment presents a unique strategic window. While less motivated buyers are taking a step back, an increase in housing supply coupled with cooling demand gives landlords an opportunity to enter price negotiations.
Investors who can leverage their current property portfolio and can lock in financing may find themselves in a strong position as the market eventually transitions back toward growth.
Don’t Miss the Kent and Birmingham Shows
Navigating the complexities of the 2026 housing market requires expert guidance and up-to-date local market intelligence.
Now is a great time to secure your free ticket to attend the National Landlord Investment Show (NLIS), where you can gain firsthand insights into how regional markets are performing and connect with industry-leading professionals.
On Wednesday, 29th April 2026, the NLIS returns to Kent and Birmingham on 20th May 2026. These events are ideal for landlords looking to be Renters’ Rights Act-ready before the landmark changes take effect this May.
You’ll have the opportunity to attend seminars on legislative shifts, speak with tax and mortgage specialists, and network with fellow investors. Head to the National Landlord Investment Show to register for your free tickets.
Can’t make the show in person?
Join the free LIS Community Hub and gain access to expert market reports, insights, on-webinars, and more. You can even watch the keynote seminar delivered by Richard Donnell from Zoopla at the recent London show on 24th March, focused on the ‘outlook for landlords and investing in 2026’. Join for free today on the web, app or both!
