Housing Market Predictions 2026: What Are the Projections for the Property Market in the Year Ahead?
Daniel Chard, Partner at conveyancing specialist Bird & Co, shares his forecasts for the UK housing market and the trends he expects to shape 2026.
The housing market remains highly sensitive to wider economic conditions. Over the last year, homeowners and buyers have had to navigate falling but still elevated interest rates, a cooling cost-of-living crisis and fresh policy announcements from the new government.
As 2025 draws to a close, the picture is more balanced than it has been for some time: house prices have inched up, mortgage costs have eased, and first-time buyers are in a stronger position than they were just a few years ago.
In this article, we'll look back at our 2025 housing market predictions and assess how accurate they proved to be. We'll then outline our expectations for 2026, covering interest rates, property prices, demand, regional trends, the rental market, sustainable new builds, and the continued impact of AI on the property sector.
Housing Market Predictions 2025: Were We Right?
In our 2025 outlook, we suggested that:
- Mortgage and interest rates were likely to continue easing
- House prices would recover modestly after stabilising in 2024
- Demand and transactions would increase
- The rental market, sustainable new builds and AI-driven tools would remain important themes.
So, as 2025 comes to an end, how did those predictions measure up?
Mortgage Rates and Property Prices in 2025
Mortgage rates did fall, but more gently than many hoped.
The Bank of England's base rate fell to 4% in August 2025, down from 5% a year earlier, and this reduction has begun to feed through into lower mortgage pricing across the market.
In our previous campaign, we cited 2024 href="tel:01476591711">01476 372 045, visit our contact page, or request a conveyancing quote online to discuss your plans for the year ahead.