Home costs are anticipated to rise by 2% in 2026 fuelled by improved purchaser affordability, Rightmove has predicted.
The common two-year fastened fee mortgage is now 4.33% in comparison with 5.08% final 12 months.
With home costs being cheaper than a 12 months in the past, rising common wages and a soothing of lending standards, exercise is anticipated to rebound after what has been a subdued second half of 2025.
Matt Smith, Rightmove’s mortgage professional, stated: “We’re anticipating to finish the 12 months with a Financial institution Fee lower, which might be good for confidence heading into the Rightmove Boxing Day Bounce.
“It’s unlikely that it’s going to trigger a lot motion in mortgage charges – the markets are very a lot anticipating December’s lower to go forward, and lenders have proven their hand early, reducing charges and competing to safe end-of-year enterprise.
“The headline is that home-movers might be getting into 2026 cheaper common mortgage charges than they had been at the start of 2025, serving to affordability.
“Those that are seeing barely decrease home costs of their space in comparison with final 12 months and should have additionally had an end-of-year pay rise, will see their affordability improved additional.
“Many home-movers may even see that the quantity that they will borrow has elevated, as lender have been rolling out the Mortgage-To-Earnings and stress fee modifications that had been permitted by the regulator earlier this 12 months.”
Common new vendor asking costs fell by 1.8% (-£6,695) in December £358,138.
This bigger than regular December drop signifies that costs are 0.6% (-£2,059) decrease on the finish of 2025 than in 2024.
On the upside, there are early indicators of post-Funds rebound, with variety of top-end London sellers up by 24% week-on-week.
Colleen Babcock, property professional at Rightmove, stated: “Cheaper price progress supported purchaser affordability and drove exercise within the first half of the 12 months, even after the April stamp responsibility deadline in England.
“Within the second half of 2025, uncertainty brought on by rumours of property tax modifications in November’s Funds swirled, some from as early as August.
“This had an influence on pricing and exercise, as sellers tried to entice nervous patrons. The market will quickly profit from the normal increase in home-moving exercise from Boxing Day.
“Rightmove’s Boxing Day Bounce is an annual occasion the place we see many start or resume their plans to maneuver after the distraction of Christmas.
“With the turkey and trimmings barely off the desk, annually we see folks heading straight to Rightmove to browse the recent listings on the market and picture how completely different subsequent Christmas may look.”
