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UK House Prices Forecast to Rise in 2026
UK house prices could rise by up to 4% in 2026, according to the latest forecasts from two of the country’s largest mortgage lenders, Nationwide and Halifax.
While both lenders expect a more modest pace of growth than seen in previous boom years, their predictions point to a housing market that continues to strengthen gradually as affordability improves and interest rates ease.
What Are the Major Lenders Predicting?
Nationwide is the more optimistic of the two, forecasting house price growth of between 2% and 4% next year. The lender believes improving affordability will be the key driver, helped by incomes continuing to rise faster than house prices and a further, modest reduction in interest rates.
Robert Gardner, Chief Economist at Nationwide, commented:
“Looking ahead, we expect housing market activity to strengthen a little further as affordability improves gradually, as it has been in recent quarters, via income growth outpacing house price growth and a further modest decline in interest rates. We expect annual house price growth to remain broadly in the 2 to 4% range next year.”
Halifax, meanwhile, is slightly more cautious, predicting growth of between 1% and 3% in 2026. Despite expectations that wage growth may slow and unemployment could edge higher, Halifax believes lower interest rates and easing inflation will help improve buyers’ purchasing power.
Amanda Bryden, Head of Halifax Mortgages, said:
“Looking ahead to 2026, we expect house prices to rise modestly, by somewhere between 1% to 3%. 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.”
Will Budget Changes Affect the Housing Market?
Nationwide has played down the immediate impact of recent Budget announcements on the housing market. The proposed high-value council tax surcharge is not due to be introduced until April 2028 and is expected to affect less than 1% of properties in England and around 3% in London.
However, changes to taxes on income from property may reduce buy-to-let activity further. This could limit the supply of new rental homes coming to the market, potentially keeping upward pressure on private rents in the short to medium term.
What Does This Mean for Buyers and Sellers?
For buyers, gradual price growth combined with easing mortgage rates could make 2026 a more stable and predictable time to move, particularly for first-time buyers who have been challenged by affordability in recent years.
For sellers, steady price growth suggests continued demand, especially in well-priced and desirable areas, as confidence slowly returns to the market.
If you’re thinking about buying, selling, or investing in property over the next year, staying informed on market trends is key. Our team is always happy to offer local insight and expert advice tailored to your circumstances.
Get in touch with us today to discuss your property plans for 2026.
