As part of our ongoing commitment to providing you with everything you need to know about the UK property market, we’re breaking down what you can expect from the housing market in 2026, using a variety of sources to build a broad overview for the entire country.
As 2025 draws to a close, it’s fair to say that the year has been relatively positive for the UK housing market, despite ongoing economic challenges.
Lenders continue to ease up on both affordability and mortgage regulations, which in turn means transactions have been relatively healthy, even if price growth has been subdued.
While the rest of the year, and beyond, will largely be dictated by the Autumn Budget, the outlook is much more positive than it was this time last year. With that in mind, let’s dive into the 2026 UK Housing Market Forecast.
What is set to happen with house prices in 2026?
After the relative chaos of 2023 and 2024, many experts believed that 2025 would be much more subdued when it came to UK house prices.
Interest rates have gone much lower than previously expected after three base rate cuts throughout the year, whilst market sentiment has improved significantly following lenders easing up on affordability and mortgage requirements. In theory, this is a recipe for improved growth.
Unfortunately, uncertainty around external economic factors, such as US tariffs, alongside an unusual lack of buyer activity over the last two months, means that house price growth has largely been quiet.
The outlook for 2026, however, is very different. Savills, in particular, believes that the economy is set to improve over the next three years, which, when combined with higher forecasted wage growth, would significantly improve buying power for households around the country.
As a result of this, Savills expects house prices to grow by 4% during 2026, which would be the largest improvement over the last three years. This is followed by cumulative increases year on year, resulting in a total of 24.5% by 2029.
Where are house prices growing the fastest in 2026?
If you’re considering a move in the new year, it’s always a good idea to understand where house prices are growing the fastest and what that might mean for your financial situation.
Following a revision in 2025, both Oxford Economics and Savills believe that the following areas will see growth through 2026:
North West: 5%
North East: 4.5%
West Midlands: 5%
East Midlands: 3.5%
Yorkshire and the Humber: 4.5%
South East: 3.5%
South West: 3%
East of England: 3%
In terms of how these areas stack up against one another, the leaders are largely unchanged. The North West and the West Midlands are still the top performers, particularly in areas such as Birmingham, Tamworth and Manchester.
The UK as a whole is expected to see growth of 4%, so anything higher than that can be considered above-average, highlighting the strength of several popular regions throughout the country.
What can we expect for UK housing in 2026?
As a whole, the outlook is much more positive for UK housing than it was heading into this year, although it’s important to note that at the time of writing, we’re still waiting to see what the Autumn Budget may hold.
With rumours that several property taxes may be reformed, this will no doubt have a significant impact on how homebuyers react, especially first-time buyers.
Likewise, if interest rate changes continue to follow predictions, this will also play a huge part in transactions and growth. Oxford Economics expects the base to hit 2.5% in 2027, which would obviously feed into more favourable mortgage rates, also helping stimulate the wider market.
As always, when buyers are struggling with affordability, schemes such as shared ownership provide flexibility and opportunity. Demand is still high and supply is still low, so for homebuyers who have a location in mind, shared ownership properties may offer an accessible route into desirable areas.
