UK house prices could rise by as much as 4% in 2026, driven largely by falling interest rates and gradual improvements in affordability. Market forecasts suggest that the housing sector may see renewed momentum after a period of slowing growth.
Economists expect price growth to remain modest, with increases ranging between 2% and 4%. Rising incomes, combined with easing borrowing costs, are expected to help buyers manage mortgage payments more comfortably over the coming year.
The average UK home price currently stands at £272,998. If prices rise by 4%, the typical property would be worth close to £284,000, marking a steady but not dramatic increase.
Interest rate cuts are anticipated soon, with the base rate expected to fall to 3.75%. Lower rates have already supported housing demand, even as annual price growth cooled from earlier highs.
Regulators have also announced plans to help first-time buyers and self-employed workers access mortgages more easily, potentially opening the door for more people to enter the housing market.