Ever wondered what it’s like to sit on the fence in the housing market, waiting for the perfect moment that might never quite arrive? I’ve chatted with so many people this year who’ve done exactly that—pausing their home-moving plans amid all the chatter about potential tax tweaks and fluctuating rates. It’s exhausting, isn’t it? But now, with the dust settling after the recent fiscal announcements, there’s a sense of cautious optimism bubbling up for 2026.
Picture this: after a rather subdued second half of 2025, where uncertainty kept buyers and sellers playing a waiting game, the market could be gearing up for a gentle uplift. Property experts are pointing to a potential 2% rise in asking prices next year. Not a boom, mind you, but a steady nudge upwards that might just encourage more activity.
In my view, this feels realistic. We’ve seen how quickly sentiment can shift once clarity emerges, and with mortgage costs easing, affordability is starting to look a bit friendlier for many.
Signs of a Brighter 2026 Ahead
The housing landscape in 2025 hasn’t been dramatic. Asking prices dipped month-on-month in the latter part of the year, influenced heavily by pre-Budget jitters. Many potential movers held back, surveying the scene for any big changes that could impact their finances.
Yet, post-announcement data suggests a rebound is underway. In premium segments, particularly in London, there’s already been a noticeable uptick in new listings shortly after the Budget. Sellers who were hesitant are starting to come forward, and buyers seem relieved that some feared drastic measures didn’t materialise.
One property analyst noted:
“The market will soon benefit from the traditional boost in home-moving activity from Boxing Day, as those who paused plans rejoin.”
That annual post-Christmas surge could be amplified this time around, with more people browsing listings and envisioning their next chapter.
What Drove the 2025 Slowdown?
Let’s rewind a bit. From late summer onwards, rumours swirled about possible property tax adjustments. This created a ripple effect—sellers lowered asking prices to tempt wary buyers, and overall activity cooled.
By December, average asking prices had fallen around 1.8% from November, landing at roughly £358,000. This was steeper than the usual seasonal dip, reflecting that extra layer of caution.
Annually, prices ended 2025 slightly down compared to the previous year, but not uniformly. Some areas held firm or even grew modestly.
- North West saw around 2.6% year-on-year growth
- West Midlands up by 1.3%
- Other northern and midland regions showed small gains
- Southern England experienced more noticeable declines
It’s fascinating how regional differences play out. The north has often shown more resilience in recent years, perhaps due to better affordability stretching wages further.
Why 2026 Could Look Different
Several factors are aligning to support modest growth. First off, the stock of homes for sale remains high— at levels not seen in a decade in some metrics. This competition has kept aggressive pricing in check so far, but as demand picks up, it could balance out.
More importantly, borrowing costs are trending downward. The average two-year fixed mortgage rate has dropped from peaks above 6% a couple of years ago to around 4.8% recently. Further reductions in the Bank of England base rate—potentially to 3.75% soon and lower in 2026—should feed through to even cheaper deals.
“Mortgage costs are likely to trend lower in 2026, though gradually. Rates won’t fall in a straight line, remaining sensitive to economic data.”
– Mortgage expert
I’ve found that even small rate drops can make a big difference to monthly payments, freeing up budget for higher offers or simply making moving viable again.
Pent-up demand is another key piece. Surveys indicate nearly one in five potential movers delayed decisions awaiting Budget outcomes. With that behind us, many are poised to act.
Regional Variations to Watch
Not everywhere will feel the same uplift. Northern regions, having outperformed in 2025, might continue leading with stronger percentage gains.
London’s premium market is showing early positive signals post-Budget, with increased seller activity in higher brackets. However, broader southern areas may take longer to recover fully from recent dips.
| Region | 2025 Annual Change | Expected 2026 Trend |
| North West | +2.6% | Continued growth |
| West Midlands | +1.3% | Modest uplift |
| South East/South West | -2.7% | Slower recovery |
| London | Flat | Potential rebound in upper end |
These shifts highlight how the market isn’t one-size-fits-all. If you’re in a hotter region, timing might favour sellers more next year.
Mortgage Rates and Affordability Outlook
Mortgage trends deserve their own spotlight. From highs in 2023, rates have steadily eased as inflation cools. Forecasts suggest the base rate could dip to around 3.5% by late 2026, pulling fixed deals lower.
For homeowners remortgaging or buyers entering, this gradual improvement could boost confidence. Perhaps the most interesting aspect is how it interacts with wage growth—real incomes rising alongside cheaper borrowing often fuels sustainable price growth.
- Monitor inflation reports—they directly influence rate expectations
- Consider fixing now if your deal ends soon, or wait if you tolerate variables
- Factor in personal circumstances; a small rate drop might not outweigh moving costs
In my experience, locking in certainty often outweighs chasing the lowest possible rate.
What About First-Time Buyers and Investors?
First-timers have faced tough affordability in recent years, but easing rates help. High supply means more choice, potentially better negotiation power.
For investors, rental demand remains robust, though tax considerations post-Budget may influence decisions. Balanced supply could keep yields stable without explosive capital growth.
Overall, 2026 shapes up as a year of stabilisation turning to mild growth—nothing frantic, but welcome after recent volatility.
Looking ahead, the key will be how economic data unfolds. If rates continue falling and confidence builds, that 2% forecast could even be conservative in spots. But external shocks—global events, policy shifts—always lurk.
Personally, I think the market’s resilience is underrated. People need homes, life moves on, and with a bit more breathing room on finances, activity tends to follow.
If you’re contemplating a move, now might be the time to start preparations. Speak to advisors, browse listings, get a sense of local trends. The rebound could gather pace quicker than expected.
Whatever your situation, here’s to a smoother 2026 in the property world. It certainly feels like the tide is turning, even if gently.
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