UK Homes Could Cost More in 2026, But Buyers May Find It Easier

House prices across the UK are forecast to rise next year, potentially increasing by up to 4%. Despite higher prices, affordability may improve due to falling interest rates.

Income growth is expected to outpace house price increases, gradually easing pressure on household finances.

With average prices currently near £273,000, even modest growth will continue to test buyers’ budgets, particularly in high-demand areas.

Lower mortgage rates are expected to support demand, with fixed-rate deals becoming increasingly competitive.

At the same time, regulatory changes aim to remove unnecessary barriers to borrowing, especially for first-time buyers and the self-employed.