2026 Housing Market Forecast: Key Insights for Buyers & Sellers
Thinking of making your move in 2026? The UK housing market is entering a more settled phase, with improving affordability, strong underlying demand, and a healthier balance between buyers and sellers.
At Redrose Estate Agents, we’ve combined latest sales data from 2025, forward-looking forecasts, and local market insight to give you a clear picture of what to expect in 2026 — and how to prepare.
Market Snapshot: Where We’re Starting from
As we close out 2025, the foundations for 2026 look more positive than many expected:
- 1.2 million homes were sold in 2025, the highest annual total since 2022
- First-time buyers accounted for 39% of all purchases, underlining strong underlying demand
- Mortgage affordability has improved, supported by steadier mortgage rates and rising wages
- Despite higher activity, house price growth cooled to 1.1% in 2025, down from 1.9% in 2024
This combination — healthy transaction levels but restrained price growth — sets the tone for a stable, buyer-friendly 2026.
1. A More Balanced Market (Still Slightly Buyer-Leaning)
After several years of volatility, 2026 is expected to feel calmer and more predictable.
- Elevated stock levels mean buyers continue to enjoy choice and negotiating power
- At the same time, improved affordability is bringing more motivated buyers back into the market
- Sales volumes are forecast to remain high at around 1.18 million transactions in 2026, close to the long-run UK average
The key message for sellers: pricing realistically will be crucial, particularly in southern England, where affordability constraints remain more acute. Read on for the North West market.
2. House Prices: Modest, Sustainable Growth
Rather than sharp rises or falls, most forecasts point to steady, sustainable growth.
- UK house prices are expected to rise by around 1.5% in 2026
- Average annual growth of approximately 2.1% per year is forecast between 2027 and 2029
- Higher levels of supply will help keep price inflation in check, even as demand improves
This measured outlook supports market confidence without overheating.
3. Mortgage Rates: Cuts Are Already Supporting Activity
Mortgage rates remain the single most important driver of buyer confidence — and conditions are improving.
As of December 2025, the Bank of England has reduced the base rate to 3.75%, the lowest level in nearly two years.
- Tracker mortgage holders have already benefited from lower monthly payments
- Variable and standard rates are expected to follow
- Fixed-rate deals are becoming more competitive as lenders price in further cuts
These changes are expected to unlock pent-up demand, particularly in early 2026, as buyers who delayed decisions ahead of the Autumn Budget return to the market.
4. Regional Performance: The North Continues to Outperform
One of the clearest trends heading into 2026 is the widening north–south divide.
- Price growth in the North of England continues to outperform the South
- In the North West, the annual house price index rose by 2.9% as of November 2025
- More affordable regions are benefiting most from improved mortgage conditions and stronger buyer demand
This highlights why local market knowledge is more important than national averages — and why realistic pricing remains essential in higher-value southern markets.
5. Tax, Policy & Budget Considerations
While speculation around stamp duty reform continues, the November 2025 Budget introduced no immediate changes.
However:
- The government confirmed that stamp duty reform remains under review for 2026
- A new high-value council tax surcharge on homes over £2 million will come into effect from April 2028
Policy developments remain a key variable, and buyers and sellers should stay alert to changes that could affect transaction costs or demand.
6. Remortgaging, Moving & Rental Market Opportunities
As many homeowners reach the end of fixed-rate mortgage deals in 2026, the year ahead is likely to bring increased reassessment — not only for owner-occupiers, but also for landlords and investors.
For homeowners, easing mortgage rates may open up:
- More attractive refinancing options
- Greater flexibility to move, upsize, or downsize
- The confidence to act after delaying decisions during periods of higher borrowing costs
Rental Market Outlook: What 2026 Means for Landlords & Investors
While improved affordability should support buyer demand, the rental market is expected to remain robust throughout 2026.
Several factors continue to underpin rental demand:
- Ongoing affordability constraints, meaning many first-time buyers will rent for longer
- Population growth and household formation supporting tenant demand
- Limited rental stock in many areas, keeping void periods low
Rather than sharp rent inflation, most forecasts point towards steady, sustainable rental growth, offering landlords dependable income rather than volatility.
Opportunities for Property Investors
For investors, 2026 is shaping up to be more income-driven than capital-growth led:
- With house price growth forecast to remain modest, rental yields will play a bigger role in total returns
- More affordable regions — particularly the North West — continue to offer attractive entry prices combined with strong tenant demand
- Improved remortgaging conditions may allow some landlords to refinance portfolios on more competitive terms
At the same time, some smaller landlords may continue to exit the market due to regulatory or financing pressures, potentially releasing opportunities for well-prepared investors.
A More Professionalised Rental Sector
While regulation remains a key consideration, it is also driving a more professional and higher-quality rental market.
Landlords investing in:
- Well-maintained homes
- Energy efficiency
- Long-term tenant appeal
are likely to benefit from stronger tenant retention, fewer voids, and more predictable income streams.
Redrose Insight
At Redrose Estate Agents, we continue to see strong tenant demand across the North West, alongside growing investor interest focused on long-term stability rather than short-term speculation.
Whether you’re reviewing an existing portfolio or considering buy-to-let opportunities in 2026, informed local advice will be essential — and we’re here to help you navigate the market with confidence.
Final Thoughts: What This Means for 2026
The outlook for 2026 is shaping up to be stable, active, and more balanced than the recent past.
Sales volumes are expected to remain elevated, at around 1.18 million transactions, while UK house prices are forecast to rise by approximately 1.5%. Improved mortgage affordability should support buyer confidence, even as supply levels help keep price growth in check.
At the same time, the rental market is set to remain a key pillar of the housing sector. For landlords and investors, 2026 is likely to be defined less by rapid capital growth and more by reliable income, strong tenant demand, and long-term sustainability — particularly in more affordable regions such as the North West.
The key factors to watch in 2026 will be:
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The pace and scale of interest rate cuts
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Buyer affordability and wage growth
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How much housing stock comes to market
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Rental demand, yields, and regulatory developments
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Any changes to stamp duty or housing policy
Whether you’re buying your first home, selling, remortgaging, or investing, success in 2026 will depend on timing, pricing, and understanding your local market.
At Redrose Estate Agents, we combine national insight with deep local knowledge to help buyers, sellers, landlords, and investors make confident decisions in a changing market. If you’re planning your next move in 2026, now is the time to start the conversation. 🏡
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Copyright Redrose Estate Agents – 2026 Housing Market Forecast: Key Insights
2026 Housing Market Forecast: Key Insights