Over the last few months, market activity paused amid uncertainty caused by the Budget, particularly for the prime end of the market. Activity is now expected to resume and even more so after Christmas, given the usual seasonal slowdown.
A couple of further interest rate cuts are expected in 2026: this will result in modest improvements in mortgage rates as much of that is already priced in. Current mortgage rates for 2 year and 5 year fixed are both 4.2%.The recent Office for Budgetary Responsibility economic forecasts pointed to slow and steady economic growth (around 1.5% p.a. over the next few years). This points to a modest price cycle for the sales market too.
Price growth will vary by region. There has been lower growth in more expensive regions over the last year. As affordability improves further over 2026 this will help lift price growth. In the meantime more affordable regional markets will continue to outperform. For instance, prices in the North have grown 5.1% over the last year.
Opportunities: looking at the relative monthly cost of rents versus mortgage payments suggest there could be a shift back towards homeownership – rents are the more unaffordable option in many markets.Source: Dataloft by PriceHubble, Bank of England mortgage rates to end October 2025, Nationwide price growth to end September 2025.