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property Experts expect the housing market to get off to a strong start in 2026, driven by falling house prices mortgage rate and reduce uncertainty.
The recovery is expected to be “bottom up” rather than “top down”, with challenges at the top end of the market but first home buyers remaining the “driving force” on the property ladder.
The December base rate cut from 4% to 3.75% provided some mortgage holders an early Christmas gift.
This is significant because UK financial data shows that around 1.8 million fixed-rate mortgages are due to expire in 2026. Last year’s “saw-saw” market saw buyers scrambling to meet the stamp duty deadline in the early months.
According to HM Revenue and Customs (HMRC), around 177,370 homes were sold across the UK in March 2025, which was around double the 86,810 house sales recorded in March 2024 (a 104% increase).
But in the second half of the year, some activity was put on hold as some potential buyers paused amid speculation about possible changes to autumn budgets.
The Royal Institution of Chartered Surveyors (Rics) previously reported that new home buyer inquiries worsened to their lowest level in two years in November.
Some buyers entering the market now may find they can snag more bargains than they could just a few months ago. According to data from real estate website Rightmove, the average asking price of a UK house fell by £6,695 month-on-month in December to £358,138.
Colleen Babcock, property expert at Rightmove, said: “We predict that the market will look and feel very different depending on which part of the UK you are in and the type of property you want to sell or buy, with particularly large differences between the south of England and the rest of the UK.”
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She said market conditions in 2026 “will favor the typical first-time buyer rather than those at the top end of the market”.
Richard Donnell, executive director at Zoopla, said: “We expect a stronger than usual rebound in economic activity in 2026 (first quarter) as many buyers postponed their home purchase decisions ahead of the November budget, leading to a significant fall in activity.”
He said the base rate cut in December “will boost sentiment going into the new year, which will also support higher levels of activity – which will support moving demand and overall sales, rather than leading to higher house prices”.
“First-time buyers will continue to drive the market and will account for two-fifths of home purchases,” Mr Donnell predicted.
He predicted that the “north-south divide” in house price growth will still exist in 2026, “reflecting the affordability of housing.”
House price growth in some areas of northern England has been outpacing parts of London and some southern areas, where house prices tend to be much higher.
Mr Donnell said: “Homeowners looking to move in 2026 need to know the value of their home before making an offer on a new home, and this is most important in the south of England.”
In terms of trading, HM Treasury said it expected around 1.2 million house sales in 2026 and 2027, down from 1.21 million in 2025.
But HM Treasury said that even with “welcome changes” to lending regulations in 2025, affordability remains very tight and could limit borrowing options for potential buyers in 2026.
The Financial Conduct Authority (FCA) has set out plans to further examine how to improve mortgage access, which could help groups such as first-time buyers and the self-employed.
Amanda Bryden, director of Halifax Mortgages, said: “Looking ahead to 2026, we expect house prices to rise slightly, between 1 and 3 per cent.
“While wage growth is expected to slow and unemployment is likely to rise, lower interest rates and easing inflation should help gradually increase homebuyers’ purchasing power.”
Robert Gardner, chief economist at Nationwide Building Society, said that by 2025: “Annual house price growth in Northern Ireland has significantly outpaced the rest of the UK, with growth averaging 11% in the first nine months of the year, almost four times the 3% rate in the UK as a whole and more than double the 5.1% rate in the next strongest performing region (the North of England).”
He added: “Wales’ house price growth trends to 2025 are broadly in line with UK overall trends, while Scotland’s house price growth is slightly stronger.
“London was the weakest performing region in the first nine months of the year, with annual growth averaging 1.3%.
“This is part of a wider trend of house price growth in the north of England outpacing that in the south.”
Looking ahead to the year ahead, Mr Gardner said: “We expect annual house price growth to remain broadly within the 2 to 4 per cent range.”
In the Budget, the government announced a hefty council tax surcharge on homes worth more than £2 million in England from April 2028.
Mr Gardner added: “The high value council tax surcharge will not be introduced until April 2028 and will apply to less than 1% of properties in England and around 3% of properties in London.”
Lucian Cook, head of residential research at Savills, said: “Given some of the challenges facing the top end of the market, our mainstream house price forecasts see average house prices rising by 2%, or £7,200, in 2026, anticipating a bottom-up rather than a top-down recovery.”
Mr Cook added: “The more affordable late-cycle markets in the north, Scotland and Wales are expected to continue to perform strongest, while price growth in London and the south is likely to remain subdued by greater affordability challenges.”
The high-end property market is expected to remain price-sensitive in 2026, with Mr Cook saying “pragmatism will remain key to successful quality sales in 2026, creating opportunities for well-informed and realistic buyers and sellers”.
Nick Leeming, chairman of Jackson-Stops, said the usual seasonal “spring rebound” in the housing market “should be more pronounced than the long-term norm”.
“After nearly six years of extraordinary volatility caused by the pandemic, fiscal shocks and political uncertainty, 2026 is expected to see a return to a more stable and identifiable housing market,” he said.
As property market activity heats up in 2026, homebuyers are reminded to pay attention to the quality of the properties they choose.
Emma Toms, chief executive of the Council for New Homes Quality, said: “Any suggestion that homebuyers will re-enter the market in 2026 is welcome news for the construction industry and the wider economy.
“But periods of high demand can put pressure on developers to build quickly. So if we want to ease the housing crisis and ensure strong growth in new homes, we absolutely must ensure quantity never comes at the expense of quality or customer service.
“Through our industry code and oversight of the New Homes Ombudsman service we set clear rules for housebuilders, drive behavioral improvements and provide buyers with a route to redress when the standards set out in the code are not met.”