Table of Contents

Current Market & Recent Trends

2025: Subdued Growth and Slowing Activity

House prices in the UK weakened through much of 2025, with both Halifax and Nationwide reporting modest gains and some official figures showing small annual price falls. Buyer demand has been constrained by uncertainty following fiscal policy changes and elevated borrowing costs. (MoneyWeek)
Asking prices dropped at the end of the year, with Rightmove reporting around a 1.8% decline in December 2025 compared with earlier in the year. (Mortgage Professional)
Mortgage rates remain above long-term averages, dampening buyer affordability. (MoneyWeek)

What this means: The market has been cooling, not crashing — creating a foundation where small improvements in key drivers could support a gradual rebound in 2026.

2026 Growth Forecasts

Forecasted Price Increases

Multiple major property forecasters now project UK house price growth in 2026 — typically modest but positive:

Jackson-Stops: Forecasts prices will rise 2%–3% next year as the market shifts from subdued to steady. (IFA Magazine)
Rightmove: Predicts prices up roughly 2% in 2026 as improved affordability sparks renewed buyer interest. (PropertyWire)
IMLA (lenders’ association) forecast: Suggests broader house price rises into 2026 supported by strengthening lending. (imla.org.uk)

Wider Economic Outlook

Official fiscal forecasts (e.g., from the UK Office for Budget Responsibility) also project moderate annual house price increases — around 2½% from 2026 onward — in line with earnings growth and market fundamentals such as supply constraints. (Office for Budget Responsibility)

Takeaway: Most forecasts expect a modest rebound (circa 2–3%, sometimes higher depending on region) — significantly better than weak or flat outcomes in 2025.

Drivers of the 2026 Rebound

Falling and More Competitive Mortgage Costs

Mortgage lenders are reducing rates, leading to more competitive deals. Some fixed-rate mortgages are becoming cheaper than in the past year. (Mortgage Professional)
Expectations of multiple Bank of England interest rate cuts into 2026 — including from current levels near multi-year lows — are improving buyer affordability and confidence. (The Guardian)

Improving Affordability

Income growth has been outpacing house price growth in recent quarters, helping buyers qualify for larger loans. (The Standard)
More affordable mortgage pricing and competition among lenders should widen the pool of potential buyers heading into 2026. (PropertyWire)

Supply-Demand Balance

Long-standing housing supply constraints — limited new listings relative to underlying demand — tend to prevent sharp price declines and support price growth when buyers return. (Pound Sterling Live)

Regional Variations

London & South East:

Higher-priced areas with tighter affordability are expected to see slower growth (around 1–2%). (The Times)

Northern England, Scotland & Wales:

More affordable regions are forecast to outperform national averages — with some areas potentially seeing increases of around 3% or more. (The Times)

Takeaway: The rebound is expected to be uneven across the UK, with affordability and local demand conditions shaping regional outcomes.

Expert Commentary

Market Confidence & Buyer Behaviour

Analysts point to a likely rise in buyer confidence as interest rate expectations stabilize and affordability improves. (The Standard)
Forecasts also note that a tentative rebound in exchange activity and listings — often kicking in early in the year — could further lift prices. (PropertyWire)

No Boom, but No Bust

Experts typically frame the rebound as gradual and modest rather than a sharp surge. House price growth in the 2–4% range is the consensus for 2026 — healthy compared with the largely flat or slightly negative trends of 2025. (The Standard)

Risks & Constraints

Affordability headwinds: If wage growth slows faster than expected or mortgage costs rise again, growth could be muted. (The Standard)
Economic fragility: A weak labour market or recession would dampen demand. (Financial Times)
Supply dynamics: New housing supply remains limited, but if housebuilding accelerates beyond expectations, upward price pressure could ease. (Office for Budget Responsibility)

Summary

Outlook for 2026:
UK house prices are widely expected to rebound after a subdued 2025. (MoneyWeek)
Forecasts generally put growth at ~2%–3% across most models. (IFA Magazine)
Stronger growth is possible in more affordable regions (north of England, Wales, Scotland). (The Times)
Falling mortgage costs, expected Bank of England rate cuts, and improving affordability are key drivers behind the rebound. (The Guardian)

Key takeaway: While not dramatic, the 2026 rebound in UK house prices is broadly supported by economic conditions and market dynamics, with modest growth likely and bonds of buyer confidence improving after a cautious 2025. (The Standard)

Here’s a detailed, case-study oriented look at why UK house price growth is expected to rebound in 2026, with real forecasts, expert commentary, and market-specific examples illustrating the dynamics behind the rebound predictions — not just high-level commentary:

UK House Price Growth Rebound in 2026 — Case Studies & Comments

1) Rightmove: Asking Price Rebound Case

Scenario: After a sluggish 2025 where average asking prices fell by about 0.6% (–£2,059) amid Budget uncertainty and subdued buyer activity, Rightmove forecasts a 2% rise in asking prices in 2026.

This rebound is tied to improving buyer affordability, more seller confidence post-Christmas, and mortgage rates declining compared with peak 2023 levels.
Activity data shows buyers and sellers paused plans in late 2025, creating pent-up demand that could kick-start 2026 moves.
Case Insight: A larger than usual December price drop followed by a stronger Boxing Day/January bounce can create a smaller base, amplifying percentage growth in 2026.
Source: Rightmove forecasts, monthly index data. (Rightmove)

Comment: Agents on the ground often describe this as a “post-holiday reset” where buyers and sellers resume plans put on hold — the rebound is behavioural as much as economic.

2) Rightmove Regional Case Breakdown

Rightmove’s regional forecast shows varying rebound strength across the UK:

Region	Expected 2026 Price Growth
UK average	+2%
Scotland	+3%
Wales	+3%
London	+1%

Case Insight: Less expensive markets (Scotland, Wales, northern England) are forecast to grow more than high-cost areas like London — showing how regional affordability constraints shape rebound patterns.
Source: Rightmove 2026 forecast. (Rightmove)

Comment: Local agents in Wales and Scotland often report stronger buyer interest where average incomes and prices are more balanced, compared with the South East. This drives more robust percentage growth locally.

3) Lender Forecasts: Nationwide & Halifax Growth Case

Industry lenders (Halifax & Nationwide) also predict price rises in 2026:

Nationwide: ~2–4% growth.
Halifax: ~1–3% growth.

Case Insight: These forecasts are backed by economists at the lenders who focus on income growth outpacing price gains, easing borrowing costs, and gradually improving affordability.
Source: Nationwide & Halifax forecasts reported by The Standard. (The Standard)

Comment: Because lenders base forecasts on internal mortgage data plus macroeconomic models, this represents a financial-sector consensus rather than a single analytical viewpoint.

4) Nationwide / Guardian Economic Commentary

Nationwide’s chief economist notes that the market should strengthen as affordability improves, wages rise faster than house prices, and mortgage costs ease — all classic ingredients for price rebounds.

Some forecasts even suggest 2–4% growth nationally.
First-time buyer demand and loosened lending criteria are cited as partial drivers.
Source: Nationwide commentary via The Guardian. (The Guardian)

Comment: Improved affordability typically matters most for first-time buyers and mid-market segments, which often react faster to changing financial conditions than luxury markets.

5) LandlordBuyer Research Forecast

An industry forecast projects 4–5% UK house price growth in 2026, with regions like the North West and Yorkshire & Humber showing especially strong five-year projections (24.3%+).

National growth is projected at 4–5%, with London expected to rise ~4%.
Source: LandlordBuyer forecast. (Property Reporter)

Case Insight: Higher forecasts like these often assume a more optimistic interest rate and economic growth scenario — illustrating the sensitivity of house price forecasts to macroeconomic assumptions.

Expert Comments & Market Sentiment

Improving Affordability Comment

Economists highlight that in 2026, mortgage rates are expected to fall further, potentially below 3.5% as competition among lenders increases and the Bank of England continues cutting the base rate.

This would make monthly mortgage costs significantly lower compared with recent peaks, incentivising buyers back into the market.
Source: The Times mortgage rate commentary. (The Times)

Expert Insight: Lower borrowing costs reduce barriers for both first-time buyers and existing owners remortgaging, which can trigger more transactions and smoother upward price momentum.

Rebound Trigger — Buyer Confidence

Rightmove and other commentators note that the “post-Budget bounce” — where buyers who postponed moves come back to market — is a key psychological trigger for rebound.
Source: Rightmove post-Budget analysis. (Rightmove)

Expert Insight: Confidence effects often appear before major economic data reflect improvements — meaning market perception itself can be a leading indicator.

Case Studies: Real Market Dynamics

Wales & Northern England — Affordable Market Case

Rightmove predicts stronger 3% growth in Scotland and Wales, driven by better affordability and local demand.
Source: Regional forecast. (Rightmove)

On-the-ground feedback: Estate agents in these regions report growing inquiries from both first-time buyers and relocating households seeking value relative to London/South East prices — a structural demand shift rather than a short-term blip.

London — Slower Rebound Case

London’s expected growth is more muted (~1% in 2026 per Rightmove).
Source: Rightmove regional forecast. (Rightmove)

Comment: London’s high entry prices and policy uncertainty (e.g., higher property taxes or luxury levies coming into effect) dampen the rebound, showing how fiscal policy and market structure influence segmented outcomes.

Summary — Case Evidence & Commentary

Multiple reputable sources forecast an upward trend in UK house prices in 2026 (typically ~1–4% nationally, and in some forecasts up to ~4–5%). (Rightmove)
Regional patterns vary: Wales and Scotland often appear as stronger growth markets, while London lags. (Rightmove)
Driver cases: improving affordability, lower mortgage rates, and return of buyer confidence are key mechanisms. (The Guardian)
Expert commentary underscores that affordability and buyer behaviour — not just economic fundamentals — are shaping the rebound narrative. (MoneyWeek)

Takeaway

The UK housing market is widely expected to rebound in 2026, with modest but meaningful price growth supported by macro fundamentals, mortgage cost declines, and renewed buyer confidence. This rebound is not uniform — regional demand and liquidity behaviour play a strong role — but the weight of forecasts and expert commentary points to a positive growth trend after a subdued 2025.