Key takeaways:
- Our property consultants predict that new vendor asking costs will rise by 2% by the top of 2026
- Home worth progress will differ relying on area, with lower-priced Scotland, Wales and northern England markets anticipated to see stronger progress, while London home costs might lag behind
- It’s a extra constructive 12 months for first-time consumers, due to a good selection of accessible properties, enhancing affordability and decrease mortgage charges decrease than 2025
The UK housing market seems to be set to enhance in 2026, with extra individuals prone to make their transfer and home costs displaying modest progress. Affordability is enhancing, and consumers and sellers are making new plans, following the tax adjustments introduced within the Price range.
Your expertise of the housing market subsequent 12 months will rely closely on the place you reside and what kind of property you’re coping with; decrease priced areas will see extra motion, while greater priced areas could really feel the consequences of the Price range adjustments.
Some first-time consumers might make the most of 2026 market circumstances as a consequence of a good selection of accessible properties on the market, common wage progress outpacing property costs and decrease mortgage charges. In the meantime, the introduction of a mansion tax coming into place in 2028 is prone to create a sluggish top-end of the market subsequent 12 months.
What is going to occur to accommodate costs in 2026?
Our home worth predictions for 2026 recommend that new vendor asking costs will rise by 2% by the top of the 12 months. Whereas this represents constructive progress, it additionally displays a market discovering its steadiness after a couple of years of financial uncertainty and a quieter market on the finish of 2025.
Purchaser affordability
Purchaser affordability ought to improve all through 2026. Mortgage lenders have been taking a look at methods to loosen their lending standards to assist individuals responsibly borrow extra. We predict that the elevated spending energy consumers have will increase property costs barely. Nonetheless, home worth progress will stay behind common wage progress and inflation, making properties extra reasonably priced in actual phrases.
Submit-Price range restoration
Our survey of over 10,000 potential movers confirmed one in 5 had been ready to see the end result of the Autumn Price range earlier than resuming their transferring plans. Many of those “Price range-pausers” are anticipated to develop into “Boxing Day-bouncers” as they begin planning their transfer now the uncertainty has cleared.
Colleen Babcock, Rightmove’s property skilled, says: “I believe subsequent 12 months can be a mixture of some key property market themes persevering with, and different new traits rising. We count on lots of those that put their transferring plans on maintain over the previous couple of months will decide them again up once more from Boxing Day and into the brand new 12 months, now the Price range is out the best way.”
Our forecast relies on our personal information masking greater than 90% of the market and makes use of a home worth predictive mannequin powered by hundreds of thousands of provide, demand, and pricing information factors. Insights from property brokers and a panel of Rightmove consultants are additionally included to deliver extra readability in regards to the influence of latest financial or coverage adjustments.
How will the economic system influence home costs in 2026?
Rates of interest enhancing
The Financial institution of England’s Base Price choices will proceed to affect mortgage prices all through 2026. Market expectations recommend we’ll see additional charge cuts subsequent 12 months, which ought to assist mortgage charges edge decrease.
Inflation stabilising
Inflation impacts every part from constructing supplies to family working prices. As inflation continues to stabilise, this could help regular, sustainable progress within the housing market fairly than the sharp worth actions we’ve seen lately. With home worth progress anticipated to stay beneath inflation, properties have gotten extra reasonably priced in actual phrases.
Wage progress enhancing affordability
Folks’s incomes are anticipated to develop quicker than property costs in 2026, which is able to regularly enhance the steadiness between earnings and housing prices. That is significantly helpful for first-time consumers working to save lots of their deposits.
Authorities coverage and taxes that influence housing
The Autumn Price range launched a number of adjustments that may have an effect on the housing market long term. The brand new mansion tax on properties value greater than £2 million will influence the highest finish of the market from April 2028.
In the meantime, the two% improve in earnings tax on rental earnings for landlords comes into impact in 2027 – this might affect the rental market and doubtlessly have an effect on some would-be first-time consumers. While these coverage adjustments don’t come into power subsequent 12 months, we count on purchaser and vendor behaviour will change beforehand.
Home worth predictions 2026: Regional breakdown
Subsequent 12 months, we count on to see significantly sturdy regional variations in home costs, primarily based on Britain’s hyper-local market traits.
Scotland, Wales and northern England are forecast to carry out extra strongly than different areas. Higher affordability in these areas, mixed with a more healthy steadiness between provide and demand, ought to help extra resilient worth progress.
London and southern England costs are anticipated to lag behind the remainder of the nation. These areas are nonetheless adjusting to the stamp obligation adjustments that got here into impact in April 2025. London home worth predictions recommend slower progress than different components of the nation – that is partly as a result of the upcoming mansion tax will disproportionately have an effect on the capital and the south of England.
| Area | Home worth predictions |
|---|---|
| UK | +2% |
| London | +1% |
| Scotland | +3% |
| Wales | +3% |
Colleen provides: “We predict the market will feel and appear very completely different relying on which space of Nice Britain you’re in, and the kind of property you’re trying to promote or purchase, with large variations significantly between the south of England and the remainder of Nice Britain. I additionally assume the market circumstances subsequent 12 months will favour typical first-time consumers over these on the top-end of the market.”
How will the 2026 housing market be for first-time consumers?
First-time consumers could have a greater shot at getting on the property ladder subsequent 12 months, as a number of elements work of their favour.
There can be loads of properties in the marketplace within the new 12 months, which implies first-time consumers have extra choices and may negotiate tougher on worth. Affordability can be set to enhance, with common wage progress outpacing home worth progress and adjustments to Mortgage-to-Revenue ratios which means lenders can lend extra. We’re getting into 2026 with decrease mortgage charges in comparison with 2023, 2024 and 2025, which additionally helps make month-to-month funds extra manageable.
Nonetheless, these extra beneficial circumstances don’t take away all of the challenges. Many will doubtless nonetheless depend on assist from household to achieve their deposit, and mortgage charges stay a lot greater than they had been at first of the 2020s, regardless of the downward pattern.
Will home costs go up for first-time consumers in 2026?
Sure, our consultants predict that home costs will go up by 2% nationwide in 2026, with regional variations at play. That mentioned, purchaser affordability may even enhance, with common wages rising quicker than the home worth will increase and higher mortgage charges than in earlier years. It will likely be a purchaser’s market in 2026, with a good selection of properties for first-time consumers and extra negotiation energy.
Who will discover the UK housing market tougher?
Dwelling movers on the very prime finish of the market will face the best challenges over the following few years.
The brand new mansion tax introduced in November’s Price range signifies that from April 2028, homeowners of properties valued at £2 million or extra pays an annual cost. Properties over £2 million will incur a £2,500 cost, rising to £7,500 for properties valued at £5 million or over.
As a result of the tax recurs yearly, there are long-term implications for each current homeowners and potential consumers. As individuals could modify their plans to arrange for this transformation, we’re prone to see some sluggishness on the very prime finish of the market subsequent 12 months, with new patterns rising as consumers and sellers reply.
Nonetheless, this impacts solely a small slice of the broader market. Round 1% of properties are priced above £2 million, with lower than 0.5% of gross sales going down on this worth bracket. The tax will hit London and the south of England housing market the toughest. Property values run greater in these areas, and extra properties sit within the affected worth brackets.
Because of this, some sellers could drop their asking worth to take a seat slightly below the £2 million mark or minimize it by sufficient to cowl what their purchaser would pay yearly. We’ll be watching carefully to see how the market responds.
What is going to occur with mortgage charges in 2026?
Since publishing our December Home Worth index, there was extra exercise with mortgage charges because of the shock drop in UK inflation reported this week and the anticipated Base Price minimize, introduced immediately by Financial institution of England. With the Base Price now at 3.75% going into 2026, the marketplace for mortgages is trying extra constructive than it did this time final 12 months.
With the most recent inflation drop, we might count on to see no less than another spherical of charge cuts early subsequent 12 months, however that is extra prone to be for 2-year fastened mortgage merchandise.
Our mortgages skilled, Matt Smith, says “Markets are anticipating one mortgage charge minimize in 2026, with a 50/50 likelihood of a second later within the 12 months. At this time’s lower-than-expected inflation figures recommend we might see additional reductions within the New 12 months, significantly for two-year fastened charges.”
Present market traits recommend the hole between two-year and five-year fastened charges will proceed to develop, after two-year charges overtook five-year charges because the cheaper possibility in 2025 for the primary time because the Autumn of 2022.
Nonetheless, the route of charges does rely on a number of variables which might change fairly rapidly all year long. Finally, the kind of mortgage charge you’ll be able to count on to see is determined by your circumstances.
In the event you’re trying to transfer subsequent 12 months, you’ll be able to hold monitor of the most recent charges on our present mortgage charges web page, which we replace each day.
Planning your transfer in 2026
Whether or not you’re considering of shopping for or promoting subsequent 12 months, we’ll hold you knowledgeable on the most recent home worth traits so you’ll be able to put together for the market.
Our Home Worth Index is printed month-to-month and tracks asking worth actions and new properties coming to the market throughout the nation. In the event you’re a first-time purchaser, make use of our purchaser guides and mortgage calculator instruments to grasp what you’ll be able to afford to purchase and plan how one can get began subsequent 12 months.
Suggestions for sellers in 2026
For these trying to promote a house in 2026, our skilled’s recommendation is to cost realistically from the beginning. With more sensible choice of properties obtainable for consumers, aggressive pricing can be important to safe a sale. Control the bought costs in your space, to get a transparent view of what your property might promote for. Use our on-line valuation device to grasp your property’s present worth, or our remortgage and stamp obligation calculators to see what you’ll be able to afford.
With modest worth progress anticipated, good selection for consumers and mortgage charges slowly declining, 2026 may very well be a great 12 months to make your transfer.
