UK House Price Predictions 2026: What Buyers and Sellers Need to Know

However, regional performance will vary significantly — and understanding these differences will be crucial for buyers, sellers and investors planning their next move.

What Will Happen to House Prices in 2026?

The outlook for house prices in 2026 is one of controlled, sustainable growth.

A projected 2% national increase reflects:

• Improving buyer affordability
• Gradually easing mortgage rates
• Renewed market confidence following Budget clarity

Price growth is expected to remain below wage growth and inflation, meaning homes may become more affordable in real terms.

Buyer Affordability Is Improving

Affordability will be a key driver of the 2026 property market.

• Average wages are forecast to grow faster than property prices
• Lenders are reviewing Loan-to-Income criteria
• Mortgage rates are lower than in 2023–2025

For many buyers — particularly those entering the market — this creates improved conditions compared with recent years.

If you're planning to purchase, Fraser & Co’s Mortgage Calculator can help you understand your buying power.

Mortgage Rates in 2026: What to Expect

The Bank of England Base Rate will remain central to the housing market outlook.

With the Base Rate currently at 3.75% heading into 2026, markets anticipate:

• One potential rate cut in 2026
• A possibility of a second later in the year
• Greater competitiveness in two-year fixed products

While mortgage rates remain higher than pre-2022 levels, they are significantly improved compared with peak levels seen in 2023.

Regional House Price Growth: A Divided Market

The regional house price forecast for 2026 highlights a clear north-south divide.

Scotland, Wales & Northern England

Lower average property values and stronger affordability are expected to support more resilient growth.

London & Southern England

London house price predictions suggest slower growth.

This is partly due to:

• Adjustments following stamp duty changes
• The upcoming mansion tax
• Higher entry price points

First-Time Buyers in 2026: A Window of Opportunity

Conditions in 2026 may favour first-time buyers more than higher-end movers.

Why?

• Increased housing supply
• Greater negotiation power
• Wage growth outpacing house price growth
• Gradually easing mortgage rates

While deposit challenges remain, affordability improvements make 2026 a potentially strategic entry point.

The Mansion Tax and the Top-End Market

Government policy will continue shaping behaviour ahead of implementation dates.

From April 2028, properties valued above £2 million will incur an annual charge. Although this affects a small proportion of homes (around 1% nationally), it is likely to:

• Slow activity at the prime end
• Influence pricing strategies
• Impact London and the South most significantly

As a result, we may see greater price sensitivity in prime postcodes throughout 2026.

Tips for Sellers in 2026

With improved supply levels, competitive pricing will be essential.

If you're considering selling a home in 2026, we recommend:

• Pricing realistically from launch
• Reviewing comparable sold prices
• Preparing for longer negotiation periods in premium markets

Planning Your Move in 2026

The 2026 UK housing market is shaping up to be more stable, more balanced and modestly positive.

• 2% projected UK house price growth
• Improved affordability
• Potential mortgage rate reductions
• Stronger regional performance outside London

It could be a well-timed year to act — provided your strategy aligns with your location and price bracket.

Whether you're buying, selling or investing, Fraser & Co’s expert team can guide you through every stage of your property journey.