As part of our ongoing commitment to provide you with everything you need to know about the UK property market, we’re rounding up what happened during Q3 2026 and what to expect from the housing market for the rest of the year.
Now that Summer is out of the way, all eyes are on the final stretch of the year, and as you’d expect, what might happen going into 2027. With Andy Burnham now in charge, the UK property market is waiting to see how initial policies and moves from the new Government will impact prices, affordability and supply.
With that in mind, we’re looking at what happened across Q3 2026 and what we can expect as we head towards the new year.
What’s happening in the UK housing market now that Q3 2026 is done?
The main headline of Q3 2026 is that the UK housing market has remained remarkably resilient, despite external factors and a change in leadership. Rather than falling sharply, as some may have expected, house prices have plateaued which could be seen as a silver lining.
Nationwide have reported annual house price growth of around 1.6%, with monthly growth restrained to just 0.2%. Whilst prices fluctuate from region to region, the conclusion is fundamentally the same: We’re not seeing the boom we saw during the pandemic but equally, the market is not crashing.
Affordability begins to improve
At the same time, affordability is steadily improving for many buyers. Wages have risen faster than house prices over the last three months and according to market figures, average house prices are now 7.5 times earnings, a decrease from the 9 times earnings we saw during the pandemic.
This doesn’t mean that home ownership is suddenly easy but it’s a step in the right direction for new buyers, especially as affordability trends towards historical norms.
Housing supply offers broader choice
A major positive for the last quarter is that buyers have had significantly more choice than in previous years. Rightmove reports that Q3 2026 saw the highest number of homes for sale, at this point in the year, for 12 years.
This means that sellers are having to set more competitive prices, which in turn is providing buyers with greater negotiating power and resulting in more reduced-price properties coming to the market.
Mortgage rates may still constrain growth
One of the key events of the quarter happened at the very end, as The Bank of England held interest rates at 3.75% whilst inflation rose to 3.1%. Naturally, this means experts are cautious around cutting rates and lenders are expected to re-evaluate product prices.
With mortgage rates still higher than the cheaper products we saw pre-2022, growth is naturally constrained and experts suggest this will be a gradual change, rather than a dramatic shift.
What can we expect from house price growth over the rest of the year?
While house price growth over the next 3 months is expected to be modest, it’s better than the forecasts we’ve had over the last year.
The general consensus is that UK house prices will end up somewhere between ‘flat’ and 2% growth year-on-year, which is a change from the booms and falls we’ve seen over the last few years.
Factors such as increased supply and improving affordability is reducing any upward pressure we might see on prices, while faster wage growth is encouraging people to reconsider their living situation.
Rightmove suggests that we’re currently seeing an Autumn bounce, although buyers are generally remaining cautious. This means the most likely scenario is house prices remain stable, transaction volumes improve and market seasonality helps provide a modest uplift of around 1 - 2%.
How do things look for first-time buyers?
First-time buyers make up a significant portion of our customer base and, as we head into Q4 and beyond, the forecasts are brighter.
Firstly, there’s significantly more homes available to choose from and a selling market that is much more likely to negotiate, which may result in savings on your purchase.
At the same time, affordability is improving slowly and house prices aren’t surging, which means you’re less likely to experience volatility during the application and purchase process.
Unfortunately, the main thing holding back first-time buyers is elevated mortgage rates and rising inflation, which directly impacts mortgage affordability.
Overall, the market is much more buyer-friendly than it has been in recent years. It’s much more positive to buy in a market steadily improving rather than seeing surging growth and, with the option of buying through an affordable home ownership scheme such as Shared Ownership, there’s plenty of potential savings to be made.
