UK Housing Market Makes Steady Progress

The UK housing market is expected to regain a steadier rhythm in 2026, with transaction levels gradually improving and house prices forecast to see modest growth. Greater clarity following the recent Budget, alongside improving affordability and the prospect of lower borrowing costs, is helping to rebuild confidence among both buyers and sellers.

As always, market conditions will vary depending on location and property type. More affordable markets are likely to see stronger levels of activity as buyers take advantage of improved lending conditions, while higher-value markets may move at a more measured pace as purchasers factor in the longer-term implications of recent and proposed tax changes.

First Timers

For first-time buyers, 2026 could offer a window of opportunity. A broader choice of homes for sale, steady wage growth that is beginning to outpace house price inflation, and the expectation of easing mortgage rates may enable more buyers to enter the market. At the prime end, however, the proposed introduction of a mansion tax from 2028 may encourage a degree of caution, potentially softening activity at the very top of the market as buyers take a longer-term view.