Money management
The 2026 UK property market outlook
The property market went through plenty of change in 2025. Interest rates dropped, different regions moved at varied speeds, and the UK Budget created a lot of discussion.
As we head into 2026, things are starting to look a little clearer. After months of guessing what might come next, homeowners can take some reassurance that the year ahead looks steadier than many recent headlines have suggested.
Falling interest rates, more realistic house price growth and ongoing investment opportunities are all shaping the direction of travel. Here’s what we’re expecting.
Property prices
Savills and Knight Frank have both lowered their expectations for house price growth in 2026. They’re still forecasting increases, but smaller ones than earlier in the year. Savills now expects around 2% growth, while Knight Frank predicts roughly 3%.
Knight Frank has also eased back its forecasts for London:
- Greater London: 2% growth (down from 3%)
- Prime Central London: now expecting prices to hold steady
- Prime Outer London: 2% growth (down from 3.5%)
The main reasons include a surge in property listings and slightly weaker buyer confidence, alongside wider concerns about the economy and tax changes.1
Mortgage rates and affordability
Interest rates fell four times in 2025 from 4.75% to 3.75% as inflation continued to ease.
Many expect this trend to continue during 2026, although at a slower pace. Lower rates are good news for anyone looking to buy, move or remortgage, as monthly payments may reduce if the cuts continue.
The rental market
The rental market is still adjusting following the UK Budget, and landlords are responding in different ways. Some are taking time to rethink their plans, while others are seeing opportunities to grow their portfolios.
A December 2025 survey by Lendlord found that2:
- 66% of landlords are planning activity linked to growth, such as buying more properties or refinancing.
- 58% expect ‘buy‑to‑hold’ to be their main strategy next year, suggesting they remain confident about long‑term returns.
Zoopla expects rents to rise by around 2.5% in 2026, which reflects steady demand.3
Government Policies
A number of policy changes will likely shape the property market in 20264, including:
- High Value Council Tax Surcharge (coined in the media as the ‘Mansion Tax’)
The surcharge applied to high‑value homes isn’t coming in until 2028, but preparations, including formal property valuations, will start in 2026. This will mainly impact owners of homes valued in the millions across the UK.
- Renters’ Rights Act
This new legislation, passed in October 2025, will bring in changes for landlords in 2026, including:
- A ban on evictions without a valid reason
- Rent increases limited to once a year
- Deposits capped at one month’s rent
- Commonhold and Leasehold Reform
Changes due next year will make it easier and cheaper for leaseholders to extend their lease, buy the freehold or take over the building’s management.
Regional trends
The north–south price divide remains prominent. Buyers are increasingly drawn to northern England and Scotland, where their money stretches further.
Eight of the top ten areas with the biggest price growth (up to October 2025) were in northern or central England and Scotland.5
- Strongest growth last year was seen in Northern Ireland, Scotland and the North-West
- The South-East saw modest growth
- Prime Central London prices are continuing to hold steady
- London, overall, experienced some reported price falls.6
What this means for our clients
2025 brought some uncertainty, especially around tax changes aimed at wealthier households.
Looking ahead, 2026 is shaping up to be steadier. With interest rates easing, policy changes becoming clearer and property prices settling, we expect new opportunities to emerge for homeowners and investors alike.
As always, we encourage clients to take a long‑term view. House prices rise and fall over time, but the market has shown resilience again and again.
If you’d like help navigating these changes or planning your next steps for 2026, we’re here to guide you.
Using our wealth of expertise and network of trusted advisers, we can support you with bespoke lending solutions, ensuring they are seamlessly aligned with your financial objectives.
For more information, please speak with your private banker or get in touch.
2Two-thirds of UK landlords plan growth | Mortgage Introducer
3Rental Market Report: December 2025 – Zoopla
5Where did house prices rise and fall the most in 2025? | MoneyWeek
Author
Chiraag Patel
Head of Credit Specialists , London
Chiraag joined the team in 2021 with responsibility for Nedbank Private Wealth’s lending proposition in the UK. His primary role is to support clients’ borrowing requirements, as well as help clients who have been introduced by mortgage brokers and other property intermediaries.
With 18 years’ experience as an adviser in the property teams of financial services firms, with an emphasis on serving the high net worth market, Chiraag’s previous roles include time as a credit specialist at Santander Private Banking and Barclays.
He holds a Certificate in Mortgage Advice and Practice (CeMAP) and graduated from the Queen Mary University of London with a BSc (Hons).
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