4 Reasons To Be Optimistic About The UK Property Market In 2026

Why the Tide is Turning in 2026

Let’s be honest: the last few years in the UK property market have felt a bit like trying to assemble flat-pack furniture in the dark. Between the post-pandemic frenzy, the shock of the mini-budget, and the subsequent cost-of-living squeeze, homeowners and aspiring buyers alike have been understandably wary.

But as we settle into 2026, the mood is shifting. As a fee-free mortgage broker speaking to clients daily, we’re seeing a distinct change. The panic has subsided, replaced by a cautious but tangible optimism.

We aren’t promising a return to the near-zero interest rates of the past decade, nor should we want the chaotic, runaway house price inflation of years past. Instead, 2026 is shaping up to be a stable, predictable, and accessible year.

Here are four data-backed reasons to feel optimistic about the market this year.

1. The Interest Rate ‘New Normal’ Has Settled

The single most significant source of anxiety over recent years has been the relentless upward march of the Bank of England’s Base Rate. That volatility made financial planning nearly impossible for many households.

Fortunately, the heavy lifting appears to be over. Following the rate cut to 3.75% in December 2025, the Bank of England has moved into a phase of stability. Economists now anticipate further gradual reductions, with many forecasting the base rate could drift toward 3-3.5% by the end of 2026.¹

The positive takeaway: Mortgage lenders are already competing vigorously. We are seeing two-year fixed rates from major lenders dipping toward the 3.5% mark, providing much-needed relief for those remortgaging this year.

2. Sustainable, Not Manic, House Price Growth

Remember the runaway house price growth of the pandemic years? While great for homeowners on paper, it was unsustainable and locked many first-time buyers out.

2026 is shaping up to be a year of market equilibrium. Leading experts project annual UK house price increases in a healthy 2% to 3% range across the country.² This steady pace allows existing owners to build equity without creating a ‘moving target’ that outpaces first-time buyers. Ultimately, this level of stability serves the market better than the volatility of boom-and-bust cycles.

3. The Affordability Gap Is Closing

This has been the most challenging hurdle. High prices, combined with high interest rates, put a massive squeeze on monthly budgets. However, the landscape in 2026 is improving significantly because wages are finally catching up.

Data from the Office for National Statistics (ONS) shows that real wage growth is now outpacing house price inflation.³ When you combine higher average earnings with the recent dip in mortgage rates, the percentage of monthly income required to service a new mortgage is at its lowest level since 2022.

4. More Choice As Market Activity Returns

For a long time, the market suffered from a lack of stock. Potential movers ‘hunkered down’ to hang onto old, low rates.

As we enter 2026, that ‘locked-in’ effect is fading. UK Finance expects around 1.8 million fixed-rate mortgages to expire this year⁴, which is driving a massive surge in remortgaging and encouraging more people to put their homes on the market, finally. Furthermore, Rightmove predicts a ‘buyer’s market’ in 2026, meaning more options and better negotiation power for you.²

Why Use A Fee-Free Broker In 2026?

A stable market doesn’t mean a simple one. It can feel overwhelming.

As a fee-free mortgage broker, our service is completely free to you. We provide specialised mortgage guidance on over 12,000 mortgage options from more than 90 lenders throughout the UK, ensuring you don't pay a penny more than you have to.

2026 is looking bright. If you’re ready to make your move, let’s find the right deal for you.

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