Experts problem verdict on potential winners and losers in 2026 housing market | EUROtoday

Property consultants anticipate a powerful begin for the housing market in 2026, pushed by falling mortgage charges and lowered uncertainties.

The restoration is predicted to be “bottom-up” somewhat than “top-down,” with challenges on the higher finish, however first-time patrons remaining a “driving force” on the property ladder.

A December base charge reduce, from 4 per cent to three.75 per cent, provided an early Christmas present to some mortgage holders.

This is important as UK Finance figures present roughly 1.8 million fixed-rate mortgages are resulting from expire in 2026. Last yr’s “see-saw” market noticed patrons speeding to beat a stamp obligation deadline in its preliminary months.

Around 177,370 residence gross sales happened throughout the UK in March 2025 – round double (a 104 per cent improve) the quantity in contrast with the 86,810 gross sales recorded in March 2024 – in keeping with HM Revenue and Customs (HMRC) figures.

But within the second half of the yr, some exercise was placed on maintain as some potential patrons took a pause amid hypothesis over doable modifications within the autumn Budget.

The Royal Institution of Chartered Surveyors (Rics) beforehand reported that the amount of latest residence purchaser inquiries deteriorated to the weakest degree recorded in round two years in November.

Some patrons getting into the market now might discover they will snap up extra of a discount than a few months in the past. According to property web site Rightmove, the common asking value for a house in Britain fell by £6,695 month-on-month in December, reaching £358,138.

Colleen Babcock, a property skilled at Rightmove, mentioned: “We predict the market will look and feel very different depending on which area of Great Britain you’re in, and the type of property you’re looking to sell or buy, with big differences particularly between the south of England and the rest of Great Britain.”

She mentioned market situations in 2026 “will favour typical first-time buyers over those at the top end of the market”.

Richard Donnell, govt director of Zoopla mentioned: “We expect a stronger-than-usual rebound in activity in (the first quarter of) 2026 as a result of a big drop in activity in the run-up to the November Budget when many buyers delayed home buying decisions.”

He mentioned the bottom charge reduce in December “would boost market sentiment going into the new year, which will also support increased levels of market activity – this will support the demand to move home and overall sales volumes rather than leading to an increase in house prices”.

Mr Donnell predicted: “First-time buyers will remain the driving force for the market and are set to account for two in five home purchases.”

He predicted {that a} “North-South divide” in home value development will stay in 2026, “reflecting the affordability of homes”.

House value development in some elements of northern England has been outperforming elements of London and a few southern areas, the place home costs are sometimes considerably increased.

Mr Donnell mentioned: “Homeowners looking to move in 2026 need to understand the value of their home before making an offer on a new home, which is most important in southern England.”

Looking at transactions, UK Finance has mentioned that it expects round 1.20 million home gross sales to happen in 2026 and 2027, down from 1.21 million in 2025.

But UK Finance has mentioned that even with “welcome tweaks” made to lending rules in 2025, affordability could be very tight and will restrict borrowing choices for potential patrons in 2026.

The Financial Conduct Authority (FCA) has set out plans to take an extra look into how mortgage entry might be improved, probably serving to teams equivalent to first-time patrons and self-employed folks.

Amanda Bryden, head of Halifax Mortgages, mentioned:”Looking forward to 2026, we count on home costs to rise modestly, by someplace between 1 per cent to three per cent.

“While wage growth is expected to slow and unemployment may edge higher, lower interest rates and easing inflation should help to gradually improve home buyers’ purchasing power.”

Robert Gardner, Nationwide Building Society’s chief economist, mentioned that in 2025: “Annual house price growth in Northern Ireland outpaced the rest of the UK by a wide margin, averaging 11 per cent in the first nine months of the year, almost four times faster than the 3 per cent recorded in the UK as a whole and more than double the 5.1 per cent recorded in the next strongest performing region (the North of England).”

He added: “Wales broadly matched the wider UK trend in 2025, while Scotland saw a marginally stronger rate of house price growth.

“London was the weakest performing region in the first nine months of the year with annual growth averaging 1.3 per cent.

“This was part of a wider trend that saw house price growth in the northern regions of England outpacing the southern regions.”

Looking to the yr forward, Mr Gardner mentioned: “We expect annual house price growth to remain broadly in the two to 4 per cent range.”

In the Budget, the Government introduced a excessive worth council tax surcharge in England on houses above £2 million from April 2028.

Mr Gardner added: “The high value council tax surcharge is not being introduced until April 2028 and will apply to less than 1 per cent of properties in England and around 3 per cent in London.”

Lucian Cook, head of residential analysis at Savills, mentioned: “Our mainstream house price forecast expects average house prices to increase by 2 per cent in 2026 or £7,200, in what is expected to be a bottom-up rather than a top-down recovery, given some of the challenges at the top end of the market.”

Mr Cook added: “More affordable late-cycle markets in the North, Scotland and Wales are expected to continue to perform most strongly, while price growth in London and the South is likely to remain more subdued, due to greater affordability challenges.”

With the highest finish of the housing market anticipated to stay value delicate in 2026, Mr Cook mentioned that “pragmatism will remain key to achieving successful prime sales in 2026, creating opportunities for well-informed, realistic buyers and sellers”.

Nick Leeming, chairman of Jackson-Stops, mentioned the seasonal “spring bounce” often seen within the housing market “should be more pronounced than the long-term norm”.

He mentioned: “Following almost six years of exceptional volatility driven by Covid, fiscal shocks and political uncertainty, 2026 is now expected to mark a return to a more stable and recognisable housing market.”

As housing market exercise ramps up in 2026, residence patrons are being reminded to be conscious of the standard of the property they select.

Emma Toms, chief govt of the New Homes Quality Board, mentioned: “Any suggestion of home buyers re-entering the market in 2026 will come as welcome news to the construction sector and the wider economy.

“But periods of heightened demand can put pressure on developers to build quickly. So, if we want to ease the housing crisis and ensure the uptake of new-build homes is strong, we absolutely must ensure that quantity never comes at the expense of quality or customer care.

“Through our industry code and oversight of the New Homes Ombudsman Service, we set clear rules for housebuilders, drive improvements in behaviour, and provide buyers with a route to redress if the standards set out in the code are not met.”