Stabilising house prices and falling mortgage rates are helping to restore confidence among first-time buyers although wider affordability pressures continue to weigh on the housing market, according to Propertymark.
The industry body says forecasts of modest house price growth in 2026, combined with easing borrowing costs, point to a market that is beginning to stabilise after several years of volatility.
As lenders reduce mortgage rates, monthly repayments are becoming more manageable, particularly for buyers who have struggled to access homeownership in recent years.
Propertymark believes this combination signals a healthier and more balanced market, rather than a return to rapid house price inflation.
FIRST-TIME BUYER BLOCKS
However, it warns that lower mortgage rates alone will not overcome the structural barriers faced by many first-time buyers, including high house prices, the difficulty of saving for a deposit and the impact of rising rents.
The organisation points to transaction data as evidence that constraints remain. In 2021, 1,073,308 properties were exchanged across the UK, compared with 920,052 in 2025, representing a fall of 14.3% over four years.
Propertymark highlights the role that temporary property tax measures played during the pandemic in supporting activity.
In England and Northern Ireland, Stamp Duty Land Tax thresholds were raised significantly during 2020–21, while Scotland and Wales also introduced higher nil-rate bands for Land and Buildings Transaction Tax and Land Transaction Tax respectively.
These measures reduced upfront costs and supported higher transaction volumes, with activity easing once the reliefs were withdrawn.
PROPERTY TAX REFORM
The body argues that these examples demonstrate how property tax reform can act as a catalyst for market activity, improving confidence and supporting wider economic growth through increased spending on home moves, renovations and professional services.
In the rental sector, Propertymark says rising rents continue to be driven by a lack of supply, exacerbated by higher mortgage rates in recent years, tax increases and rising operating costs for landlords.
SUSTAINABLE FOOTING
Nathan Emerson (main picture, inset), CEO of Propertymark, says: “Lower mortgage rates are a positive step and will undoubtedly help many first-time buyers reassess their options. Combined with modest house price growth, this shows the market is finding a more sustainable footing.
“However, affordability pressures remain complex and property tax thresholds have failed to keep pace with rising house prices and wage growth over the past decade, increasing the tax burden on buyers.
“Propertymark believes reform is needed to create a fairer, more responsive property taxation systems across the UK that reduce upfront costs, support first-time buyers, and improve market mobility.
“Alongside this, action to boost housing supply and targeted support for those struggling to save for a deposit will be essential if homeownership is to become a realistic option for more people.”
