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UK Property Market Forecast for 2026
As 2026 settles in, buyers, sellers, and landlords are asking the same fundamental questions about the UK property market: Will UK house prices rise or fall in 2026? Where is the market strongest? What makes a good first-time buy? And where does it make sense to downsize for retirement?
Based on the core data from the official Land Registry's UK House Price Index (HPI) and market indicators from lenders, we at Clifton Private Finance evaluate the UK housing landscape and what it means for you.
What is the UK Property Market Forecast for 2026?
Our property market review of 2025 suggests it was a year of stable growth in the UK. And 2026 looks to continue the trend.
The Bank of England reduced the base rate to 3.75% in December 2025, the first sub-4% rate since early 2023; accordingly, the mortgage lenders responded, with a range of sub-4% fixed rate mortgages on offer to borrowers in this first quarter of 2026.
For the general UK outlook, this consistency is good and movement is in the right direction for home buyers and investors alike. Mortgage costs alone do not define the marketplace; other concerns, such as borrower affordability constraints and market sentiment, are key factors for anyone looking to buy property.
According to the latest available HPI statistics from the Land Registry, the year-on-year growth for the UK market was 1.7% with average house prices settling at £266,794. As with any ‘average’ figures, however, it’s essential to explore such data in greater depth. 1.7% growth does not represent the truth across the country as a whole, with many regions reporting higher than average growth and some suffering a downturn.
UK Property Market Forecast by Region
Significant regional variation exists across the UK, limiting the usefulness of country-wide data. Exploring the trends to understand the potential market changes in 2026 is more effectively performed when regions are considered both in isolation and in comparison to others.
UK Property Market HPI Data by Region
|
Region |
Growth % |
Seasonally Adjusted Average Property Price |
|
Northern Ireland |
+7.1 |
£193,247* |
|
Northeast |
+5.0 |
£161,083 |
|
Scotland |
+3.3 |
£189,297 |
|
Northwest |
+3.1 |
£211,533 |
|
Yorkshire and The Humber |
+3.1 |
£204,155 |
|
West Midlands Region |
+2.7 |
£245,561 |
|
East Midlands |
+2.3 |
£239,608 |
|
East of England |
+1.9 |
£337,139 |
|
Wales |
+1.5 |
£206,976 |
|
Southeast |
+0.7 |
£381,329 |
|
Southwest |
-1.3 |
£299,433 |
|
London |
-2.4 |
£547,299 |
* Northern Ireland data is provided by Land & Property Services NI; Average Property Price in this region is not seasonally adjusted.
3 Regions Where UK House Prices Expected to Rise Most
1. Northern Ireland
- Growth: +7.1%
- Average Property Price: £193,247
Following impressive growth throughout 2025, current market consensus is that property prices are likely to rise in Northern Ireland throughout 2026, though that growth percentage is likely to come down from its current headline figure.
Northern Ireland house prices are affected strongly by supply and demand. It is a region where stock is not quite meeting interest, despite developer engagement. Infrastructure complexities, particularly regarding water and waste, are slowing proposed developments and putting further pressure on existing properties.
The sub-£200k average price is also helping fuel house price growth, with Northern Ireland appealing particularly for first-time buyers who can meet lenders’ affordability requirements.
2. England: Northeast
- Growth: +5%
- Average Property Price: £161,083
Multiple regeneration projects in the Northeast are helping encourage investment to the region. First-time buyers less career-tied to the major metropolises of London, Birmingham, and Manchester are looking to explore cheaper alternatives; employment opportunities are on the rise, while improved broadband infrastructure makes remote work more reliable and appealing.
Similarly to Northern Ireland, affordability drivers are key in the Northeast. Income better meets mortgage ratios and a slightly more affordable cost of living helps keep outgoings to a minimum. Families and professionals are more able to pass stress tests that are reducing more cautiously than market mortgage rates.
3. Scotland
- Growth: +3.3%
- Average Property Price: £189,297
Covering the full country of Scotland - an area of over 30,000 square miles! - as a single region suffers somewhat from the same inaccuracies as an overview of the UK as a whole. Though official data is structured in this manner, breaking it down does improve the understanding of the full picture of growth and house prices in the country.
Figures for Edinburgh match the region’s growth figure of 3.3%, but a far higher house price average of £292,089 (not seasonally adjusted). Conversely, the outlying Orkney Islands influence disproportionately with 18.3% growth, likely due to a far smaller sample size made up of fewer property transactions, while Aberdeen reports a significant downturn of -7.5%.
In real terms, this doesn’t discount the growth figure for Scotland, and the housing market in the country shows stability for those exploring a move within its borders. Buyers looking for investment potential, however, should consider Scotland within a far wider context, understanding its devolved nature and independent property laws and taxes.
3 Regions Where UK House Prices Are Expected to Fall Most
1. London
When considering the chart above, it’s easy to leap to lazy conclusions: ‘London’s overall growth figure is negative, therefore all London house prices are falling.’ Once more, this oversimplification leads to misunderstandings and it is only through breaking down the data that we can build a better picture.
Outer London’s growth figure is quite different, showing stability, with a modest growth statistic of +0.3%. Well-performing prime outer London properties include terraced houses (up +1.8%) and semi-detached houses (up +2.1%). Semi-detached properties are similarly stable throughout London with inner London growth also showing a slight rise of +0.3%, particularly impressive when compared to inner London’s overall decline of -4.4%.
It is the City of London, the financial Square Mile, that most heavily affects the region’s appearance of instability, with a focused downturn of -18.1% - a single data outlier that shouldn’t be used to base general investment into London’s housing market.
For homeowners looking to buy into the nation’s capital, London remains a stable housing market. While short-term growth may be limited, history shows that long-term investment is traditionally positive. Terraced and semi-detached homes for professionals and families remain resilient, with property prices remaining healthy.
2. East Anglia
While not an official region, some market analysts have pointed to ‘East Anglia’ as an area where prices are falling. A subset of areas in the East of England region, locations including Cambridge (-2.0%), North Norfolk (-2.6%), Norwich (-3.8%), and King’s Lynn and West Norfolk (-4.1%) support this conclusion - even while adjacent areas are performing well, such as East Cambridgeshire, which shows impressive growth of +9.5%.
This market volatility can be explained when considering socio-economic factors. Post-pandemic, East Anglia saw very strong growth, buoyed by cash-rich buyers looking to remote work and accepting longer, less-frequent commutes to fuel lifestyle changes. This, in turn, led to increased demand and exposed less-affluent buyers to tighter mortgage affordability. A few years later, prices are softening as the UK housing market naturally rebalances.
New-build supply and investment also has an impact in parts of Cambridgeshire and Norfolk, expanding the choice for buyers and reducing seller dominance.
Caution in East Anglia, therefore, is reasonable and may be complicated for potential property buyers to navigate. Up-to-date advice from estate agents and mortgage brokers regarding a specific chosen location will help ensure accurate house price evaluation.
3. Southwest
The Southwest has long been one of the less-affordable regions of the UK, with high house prices and below average local earnings. Like East Anglia, it is a region where post-pandemic lifestyle moves pushed demand up and now, as focus on remote work dwindles, the market is gently re-establishing itself.
In addition to this, the Southwest includes many coastal holiday destinations, with holiday-lets having dominated the market for years. A government-led drive to reduce holiday-lets and second homes, and make properties more accessible for local first-time buyers, is slowly doing as intended. It is bringing down the average price of smaller, starter homes to accommodate younger families.
As natural monthly fluctuations show a trend towards stability rather than a downturn, the Southwest is likely to remain a soft market throughout 2026.
What Does the UK Property Market Forecast Mean for First-Time Buyers?
For first-time buyers, the key is affordability - being able to balance salary and expenses against the mortgage is the single most important consideration.
Thankfully, 2026 looks to support this need. While UK house prices are generally rising, presenting an outlook of forever chasing a moving target, a widening range of lower-rate, higher LTV mortgages offers the answer.
At the tail end of 2025, mortgage lenders were still cautious regarding lowering affordability stress rates. This meant that while the true mortgage rates on offer had lowered to below 4%, the affordability tests were slower to reflect this benefit and some first-time buyers were still finding their applications rejected. As lenders gain confidence in 2026, these stress rates should come down and boost mortgage acceptance.
Potential buyers with a flexible lifestyle might want to consider a strategic move to a growth region with a low entry point to get on the property ladder, taking advantage of the easing mortgage rates to lock in a fixed rate for a few years, with a view to re-evaluating once they’ve built up equity.
Overall, an attitude of responsible budgeting, location flexibility, and exploring mortgage options will give first-time buyers the grounding they need to secure a home.
What Does the UK Property Market Forecast Mean for Existing Homeowners?
Homeowners have faced a difficult couple of years, with the tight affordability tests making upsizing difficult for many, while uncertainties have impacted downsizing timing.
With the Autumn 2025 budget behind us, the market at the beginning of 2026 is stable and understood. Considerations such as stamp duty are clear - if onerous - and this provides homeowners looking to move with the grounding that’s needed to make informed decisions.
When exploring the annual house price growth charts as a homeowner evaluating a move, it is important to understand the impact on both sale and purchase, especially when going from one region to another. When in a region of strong growth, the temptation is always to wait just a little longer to squeeze more value, but timing is only one factor in decision making, with personal circumstances, employment realities, and market opportunities all additional considerations.
The UK housing market also has an impact on homeowners looking to remortgage. Property value and equity will dictate remortgage LTV and by extension, the mortgage rates on offer.
Specialist advice from Clifton Private Finance is recommended to gain access to the wide range of products available, and to secure the best and most suitable deal.
What Does the UK Property Market Forecast Mean for Landlords?
Landlords with the flexibility to select property without being limited by location might consider the top growth regions, such as Northern Ireland, or the Northeast, where prospective growth through 2026 and beyond aligns with below average prices to present strong opportunities.
Like owner-occupiers, landlords have to consider affordability pressures when evaluating investment though, rather than salary-based affordability considerations, these are based on rental income. Here, property market sales data does not properly provide enough information regarding rental yield to make a decision based on growth figures alone.
Where the data does excel is in providing a valuable overview of trends. The causes that have pushed price growth throughout 2025 continue into 2026; thus, Northern Ireland’s limited stock provides opportunities for landlords able to move swiftly, while the drive for councils in Scotland to provide affordable housing offers landlords experienced in renovation the chance to enter areas of strong growth and high long-term demand.
What Does the UK Property Market Forecast Mean for Renters?
For professionals and families looking to rent rather than buy, exploring UK house price growth can help indicate the rental trends, but not as a direct correlation. While it is true that areas where average house price is high typically equate to high rental costs, growth does not automatically translate as rising rents.
Price growth is mainly driven by owner-occupier demand - somewhat disconnected from the rental market - and it can take months or even years before rents rise to catch up with the sales data. For renters in the UK housing market, forecasting is a step further removed, with growth from 2025 potentially impacting rents in 2027 and beyond; it remains useful in context but cannot be used to predict short-term rental fluctuations.
Regional demand through factors such as improved employment or regeneration, however, impacts both rental markets and property purchases in similar ways. Growth that’s driven mainly through socioeconomic realities can quickly impact rental prices. In these areas, securing long-term rental agreements can help provide security and stability.
Secure the Borrowing You Need with Clifton Private Finance
Clifton Private Finance is here to help you get the best mortgage deal for your 2026 property purchase. Our fully independent mortgage experts will help you professionally evaluate your finances, identifying where small improvements can greatly increase your ability to pass lenders’ affordability checks for specialist products such as:
Our pre-approval process will provide you with the confidence you need to select a lender and move to a full mortgage application.
As a whole-of-market mortgage broker, we have established relationships with the wide range of UK mortgage lenders, giving you access to specialist mortgage deals that are tailored to suit your exact circumstances - no matter how complex.
Our team will compare the options available to find you a mortgage deal that offers an affordable rate and the flexibility you need, whether you’re self-employed, suffering from a history of poor credit, or struggling to meet banks’ affordability criteria.
Clifton Private Finance can help make your 2026 property goals a reality. Contact us today for a free and friendly consultation.
