With the new year upon us, now is a great time to look at the year ahead, here are Slades early thoughts on the housing market for 2026…
Modest growth expected, but no return to boom conditions
We expect to see prices rise this year, the increases though are likely to be limited.
Nationwide has predicted that UK house prices to rise by between 2 per cent and 4 per cent in 2026, helped by lower mortgage rates and incomes growing faster than prices. Halifax, is forecasting price growth of around 1 per cent to 3 per cent but highlights weaker wage growth and a softer labour market. Whilst none of these forecasters are suggesting a rapid post-budget recovery, it is good to see the general feeling is for house prices to increase through 2026.
As in recent years, where you live is likely to be one of the key factors to effect values.
Lower-priced areas are likely to see the strongest growth momentum. This is because, in these areas the gap between wages and average house prices is less pronounced, leaving more room for an increase.
Rightmove anticipates a modest 2% rise in average asking prices for 2026, this follows a dip in 2025, with the improvement being driven they say by a higher level of affordability, a healthier economic outlook, and a surge in buyer activity post-Christmas, especially among first-time buyers seeking more choice, while sellers in the top-end of the market still needing to be realistic with pricing despite overall market optimism.
Will we see more First-time buyers?
Conditions for first-time buyers are more favourable than they have been for several years.
As mortgage rates have fallen from their peak and lending criteria has eased, improving borrowing capacity. At the same time, wage growth has been outpacing house price growth, helping improve affordability, particularly in the lower value regions.
First-time buyers accounted for close to two in five moves last year and are expected to remain key drivers of the market in 2026, especially outside of the more expensive areas.
What will happen in the upper quartile of the market?
Whilst the new charges on homes valued at £2 million and above do not kick in until 2028 they will undoubtedly already be on people’s minds. This is expected to have an effect on behaviour of both buyers and sellers with expected costs being factored into negotiations. Early indications across all Slades offices is positive with increased communication levels with potential vendors and purchasers alike.
All in all, at this early stage of the year, the prospects are looking positive for modest growth in sales and house values in all areas of our market.