UK house price growth is slowing sharply as a flood of new listings gives buyers more choice — but experts warn that the surge in sellers includes a growing number of landlords, threatening to deepen the country’s rental crisis.
According to Zoopla’s latest House Price Index, annual house price growth across the UK has fallen to just 1.4%, down from 2.0% earlier this year. While the average UK home now stands at £268,400 — nearly £4,000 higher than a year ago — values are slipping in parts of London and the South, where some markets are seeing outright declines.
The slowdown is being driven by an increase in homes coming to market. The average estate agent now lists 37 homes — up from 32 this time last year — as more homeowners look to sell and move within the next year. Sales activity has ticked up too, with a 6% rise in agreed transactions compared to 2024.
However, the surge in listings is reshaping local markets, with price growth lagging in areas experiencing the sharpest supply increases. In London, the South East, and South West, the number of homes for sale is up by 16–19% year-on-year — and house prices there have barely moved, with growth under 0.5%.
Conversely, parts of the North, West Midlands, and Scotland have seen only modest supply increases, which has helped maintain a degree of scarcity. House prices in these areas are rising at a healthier rate of 2–3%, with hotspots like Wigan (4.3%), Falkirk (3.8%), and Blackburn (3.6%) leading the way.
Affordability remains a critical factor. Where average house prices exceed £500,000, values are slipping — by as much as 4.3% in central London — as high borrowing costs and income constraints limit buyer demand.
But beyond the usual economic levers, tax and policy changes aimed at landlords and second homeowners are accelerating the shift. Zoopla reports a rise in sales from landlords offloading properties amid rising costs and tighter regulation.
The impact is twofold: not only does this add downward pressure on house prices in affected areas, but it also shrinks the supply of rental homes at a time when demand has never been higher.
“This exodus of landlords from the market is reducing the availability of rental properties, especially in urban areas,” said a housing analyst. “With demand for rentals continuing to soar — fuelled by affordability challenges in the buying market — this risks pushing rents even higher and worsening the housing crisis for tenants.”
In more affordable markets — where homes are priced under £200,000 — house prices continue to grow, up 2.7% annually. These areas now represent around half of all UK homes, and are proving more resilient thanks to ongoing demand and greater affordability.
Zoopla warns that as more landlords sell off homes and new investor activity remains subdued, rental supply will continue to be squeezed. The result is a growing imbalance in the lettings market, just as more households are turning to renting as a long-term solution.
In short, while buyers may welcome more choice and softer prices, the shifting dynamics pose deeper structural risks — particularly for renters left with fewer options and soaring costs.