Next year should be a year of steady progress for the housing market. After a challenging 2025 where we saw little to no house price growth – and in some parts of the South and London, prices actually fell – I think we’ve reached a turning point.
The Autumn Budget removed a layer of uncertainty that had been holding buyers and sellers back through most of Q3 and Q4 and we’re already seeing the impact.
Our post-Budget survey showed 42% feeling more positive about moving in early 2026, and crucially, applicant numbers are up year-on-year. There’s clearly pent-up demand from people who stayed on the sidelines through the autumn.
The real momentum will come from interest rates. The Bank of England has cut rates five times this Parliament, which – according to the Budget – saves buyers around £1,200 a year on a typical mortgage.
IMPROVING AFFORDABILITY
With an almost certain 0.25% cut expected on 18th December and further reductions through 2026, mortgage rates are already coming down, and lenders are becoming more competitive.
That’s the single biggest factor that will unlock activity next year, and coupled with prices having stabilised or corrected over the last 12 months, affordability is improving.
“We’re already seeing telltale signs.”
Properties that have struggled for months are suddenly getting two or three offers. Vendors are prepared to compromise in ways they weren’t earlier in the year.
These are encouraging signals and I’m predicting a very strong Q1 as this pent-up demand meets the new supply that always comes to market in January and February.
However, the market won’t transform overnight. Stamp duty remains unchanged, which will continue to dampen mobility and transaction volumes.
“The government’s priorities lie elsewhere.”
We’d hoped for meaningful reform in November’s Budget but it’s clear the government’s priorities lie elsewhere.
What could make a real difference is the proposed reforms to the homebuying process. Our research shows nearly half of buyers and sellers have experienced a fall through, with 34% collapsing simply because someone changed their mind.
“The appetite for change is overwhelming.”
The appetite for change is overwhelming – 80% support binding offers and 90% of sellers would pay for upfront information packs.
If the government gets the implementation right, 2026 could be the year we start to fix a system that’s frustrated people for decades.
I’m cautiously optimistic. When properties start selling in greater numbers, buyer psychology changes – people become more motivated to act when they see properties going under offer around them.
“Political uncertainty has cleared.”
Interest rates are heading in the right direction, political uncertainty has cleared and a market that’s found its level all point to a more stable environment.
The key will be execution, both from the government on reforms and from the Bank of England on rates. Get those right, and 2026 could be a solid year for the market.
