UK home prices are expected to rise to a fresh record this year, as rate cuts continue to ease mortgage burden on buyers.
Property portal Rightmove forecasts that house prices will rise by 2 percent in 2026, but stresses it will be a “buyer-led” year, as ample housing supply gives buyers greater bargaining power than in recent years.
If tenants find that mortgage payments are cheaper than rent—especially if landlords seek to pass higher property taxes onto them—financially capable renters may choose to buy instead, it said.
For first-time buyers who have saved enough for a down payment, financial pressure should be relatively manageable as interest rates fall, it added.
The Bank of England has cut rates several times over the past year, with the base rate falling to 3.75 percent by the end of last year, the lowest level in nearly three years.
Another property website, Zoopla, notes that interest-rate cuts will bring buyers back to the market in early 2026. It forecasts average UK house prices to rise by 1.5 percent in 2026, with price gains in the Midlands, northern England, Scotland and Northern Ireland expected to exceed 2.5 percent.
Ryder & Dutton, a property firm in northern England, said further rate cuts should improve market momentum in 2026. It expects homes priced below £500,000—benefiting from more affordable mortgage thresholds and lower rates—to see price increases of 2 percent to 3 percent.
The average UK home price stood at about £300,000 last November, up 0.7 percent for the year, still marking a record high, data from financial institution Halifax showed.
A major highlight in 2025 was the sharp increase in the stamp duty threshold that took effect on April 1, prompting many buyers to rush into the market ahead of the deadline.
In addition, UK Chancellor Rachel Reeves announced in the second half of last year an annual High Value Council Tax Surcharge on properties worth more than £2 million, commonly referred to as the mansion tax. Properties valued between £2 million and £5 million are subject to an additional £2,500 to £5,000 per year, while those above £5 million face an extra £7,500 annually.
