"First-time buyers are expected to drive the UK housing market in 2026, with further interest rate cuts likely to improve stretched affordability. The for-sale market should accelerate moderately, with prices rising by 2% to 4%, while rent rises are likely to slow from the rapid increases of recent years, according to lenders and estate agents."
"House prices across the country rose less than expected in 2025, after a stamp duty tax break expired at the end of March and buyer confidence was knocked first by Donald Trump's tariffs in April, and later by speculation around property tax changes before Rachel Reeves's budget in late November. Property values climbed by 1.8% in the year to November, leaving the average home valued at 272,998, according to Nationwide building society."
"Uncertainty around the budget pretty much killed the market in the second half of 2025, so we were kind of just treading water, said Marcus Dixon, the head of residential research at JLL. When inflation is taken into account, house prices are falling in real terms, which for affordability, it's not necessarily a negative, he added."
First-time buyers are expected to drive the UK housing market in 2026 as interest rate cuts improve stretched affordability. The for-sale market should accelerate modestly with prices rising by about 2%–4% while rent growth slows. Falling mortgage rates, earnings growth ahead of inflation, and slow house-price rises have lowered monthly mortgage costs for first-time buyers to their lowest share of income since 2022. House prices rose less than expected in 2025 after a stamp duty break ended and confidence weakened amid tariffs and tax-change speculation. Nationwide recorded 1.8% annual growth to November with an average value of £272,998. Economists expect further Bank Rate cuts and lenders are offering sub-4% fixed deals.
Read at www.theguardian.com
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