Blog

Property trends in 2026: A local forecast

Monday, June 8, 2026

The UK property market shows a broadly resilient picture in spite of ongoing global unrest. Residential sales have been supported by some easing of affordability but remain tempered by cautious consumer confidence, static interest rates and wider choice for buyers in many areas. For lettings, as the Renters Rights Act is rolled out, the dominant theme remains undersupply, although demand has cooled from its peak as affordability limits are tested and available stock is generally improving. Overall, the picture appears to be less volatile but more stable and increasingly localised.

Nathan Emerson, CEO of Propertymark, commented: “March delivered some encouraging signs across the housing market, with sales agreed, buyer registrations and viewing activity all moving in a positive direction as we entered the traditionally busier spring period. Although inflation remained above target and global economic pressures continued to influence sentiment, we saw many buyers adapting to current borrowing conditions and proceeding where pricing expectations were realistic.

We also saw improved levels of stock entering the market, which was helping to provide consumers with greater choice and creating a more balanced environment in some areas. However, affordability pressures continued to weigh heavily for many households, particularly as mortgage rates remained sensitive to wider economic events.”

Modest house price growth is expected across the UK in 2026; industry forecasts suggest estimates of around 1.5% - 4% for the year. This reflects an environment where real wage growth and lending conditions are helping demand, but where buyers remain price-sensitive and mortgage rates are still above the ultra-low levels seen before 2022.

One of the clearest trends is the return of greater supply in the sales market, giving purchasers more choice and reducing the urgency seen in tighter markets. This is particularly important in southern England, where pricing has become key to a timely sale. Expert advice on the local property market and demand levels for specific property types is vital to pricing correctly from the outset and generating quality viewings. Overpricing is quickly exposed, with properties taking longer to sell, especially in higher-value locations.

First-time buyers remain crucial to market momentum. Wage improvements, better mortgage options and supply of homes are helping FTBs, although deposit requirements and affordability tests continue to limit access. Sales to FTBs are expected to remain stable with activity dependent on realistic pricing, good presentation, and whether properties meet preferences for energy efficiency, space and running costs.

The lettings market remains tighter than the sales market, but with signs of rebalancing. Demand is still relatively strong, but has eased from the extreme competition immediately post-pandemic. Supply has improved somewhat, but stock levels remain below the pre-pandemic norm. This combination is slowing rental inflation but not reversing it. For landlords, that means a shift towards careful pricing with expert agent advice. Gross yields continue to attract investors although financing costs and compliance obligations are taking time input and a larger share of returns.

The fundamental issue in lettings is still a lack of supply. A combination of landlord exits, limited new-build provision, higher interest rates and heavier regulation has left many areas short of rental stock. Policy and regulation are also central to the outlook. Ongoing reform of the private rented sector, stronger compliance expectations, and uncertainty over future landlord obligations are encouraging some smaller investors to reconsider their position. Expert advice, compliance and management input from an experienced agent is increasingly important in this context and can make all the difference to a landlord’s peace of mind.

For 2026, the most likely scenario is modest sales price growth, with some regional divergence. If mortgage rates remain stable or ease, buyer confidence will improve. However, inflation pressure or interest rate rises could quickly dampen sentiment, particularly in southern England and higher-value sectors.

Overall, 2026 looks set to be a year of stability rather than correction: less frantic than recent years, but still defined by affordability pressures and a strong need for realistic expectations from sellers, landlords, buyers and tenants alike. Sales will be determined by local pricing realities and the rest of 2026 is likely to reward accurate pricing, up to date knowledge of local conditions and opportunities.

For more information, advice and a free, no obligation market appraisal of your property whether for sale or to let, please contact your local Frost office.