Zoopla House Price Index Q3 2025: UK property market analysis

We are entering the final quarter of 2025, and the UK housing market is proving largely unaffected by global political instability and financial concerns. The latest House Price Index from Zoopla gives a good view of the state of the market at the end of Q3 2025:

• House prices are still growing, with a North-South divide firmly established
• Pre-Budget speculation has introduced a note of caution
• Mortgage rates are stable

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UK house prices are still growing nationally, and growth is faster in the North

UK property values have gone up by an average of 1.4% in the last 12 months, according to Zoopla’s Index. The new national average price has now reached £271,000 according to the property portal, a figure which is in line with the latest data from the Office for National Statistics and Nationwide.

However, it is a lot lower than the Halifax house price index, which puts the UK average at more than £290,000.

What all sources agree on is that the market is growing – and it’s growing a lot faster in the North of England. Zoopla notes that growth is weakest in Southern England, with a regional average of just 0.5% property value inflation over the last year. In contrast, the North West has seen average growth of 3.1% in the same time period.

Data from Nationwide goes even further, showing that house price growth in the North as a whole may have been more than five times higher than in London over the last year. That makes this a great time to buy property for sale in Manchester, or invest in Liverpool city centre buy-to-let.

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Pre-Budget speculation is adding a note of caution to the market

Property is a reliable asset that has proven its ability to withstand economic pressure. However, it’s still important to look ahead to major fiscal events which may affect your investment. The Budget due in November has made some in the property world more cautious.

Zoopla’s latest Index shows that pre-Budget speculation may be affecting some areas of the market. Buyer demand and listings for the most expensive homes (those costing over £500,000) are down compared to a year ago, as those at the top of the market are waiting to see what economic measures will be in the Budget.

However, there is no indication that demand for lower- and mid-market properties has changed at all, so investors should be confident they can continue as before.

Another positive factor is the government’s plans to speed up the buying process. Once brought into law, sellers will be required to provide vital information about the state of the house themselves, rather than buyers. That will speed up the buying process by four weeks, making investing in UK property a faster, easier process.

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Mortgage rates are stable

The Bank of England recently voted to hold the base rate of interest following a previous cut in August, which took it to the lowest level since March 2023. That was good news for anyone using a mortgage. Rates have continued to come down and have now reached a point of stability.

The Zoopla Index shows that the days of 10%+ rates are well in the past. The average rate for a five-year fixed residential mortgage is now between 4% and 5%. Research from MoneyfactsCompare shows that a two-year fixed buy-to-let mortgage is now available at a rate of 5.04% - that’s almost 1.5% lower than you could find two years ago.

Rachel Springall, Finance Expert at Moneyfactscompare.co.uk, also noted that investors who use limited companies could see more benefits from the current mortgage situation.

She said: “Landlords weighing up their options to reduce costs may be pleased to see the choice of limited company buy-to-let deals has grown. There are now 1,730 fixed-rate deals with a term of two to five years on the market, up from just 841 back in October 2023. The growth should be welcomed in a market that is consistently facing external pressures.”

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Should you invest in UK buy-to-let property in 2026?

2026 is a good time to invest in UK property. The market is growing, and the cost of borrowing is stable at a much lower level than it was two years ago. Combine that with forecasted average growth of more than 20% by the end of 2029, and this is a good time to buy UK property.

Want to know more and discover the best property investment areas for 2026? Contact our team today for a free consultation.