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We look at what house price forecasts suggest for 2026, and what this means for you.
KEY INFORMATION
Are UK house prices going up or down?
Are house prices falling in the UK? No. While monthly prices can fall, most major indices show annual growth, meaning average prices are not falling overall.
Paula Higgins, HomeOwners Alliance CEO, says: “UK house prices are likely to be around 2% higher in 2026, as easing mortgage rates and steady wage growth slowly improve affordability. That should support modest price growth rather than a sharp rebound. We expect the current north-south divide in house price growth in England to persist with higher growth in the north of England than in the south.”
For more detail on what’s happening to house prices in your area, and the outlook for house prices see our monthly House Price Index report.
| Index | Monthly change | Annual change |
| Land Registry | -0.3% | +1.3% |
| Nationwide | +0.3% | +1.0% |
| Halifax | +0.3% | +1.3% |
| Rightmove | 0.0% | +0.0% |
| Average (excluding Rightmove) | +0.1% | +1.2% |
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In short: no, UK house prices are not falling overall. While some recent data shows small monthly declines, this does not mean there is a sustained drop in values.
When you look at the bigger picture, particularly annual changes and sold-price data, most indicators show that house prices are broadly stable or rising slightly, rather than going down.
This distinction is important, as headlines about short-term falls can give the impression that UK house prices are falling, when in reality the longer-term trend remains positive.
In other words, while you may see short-term movements that suggest prices are dipping, this does not amount to a sustained decline in the market.
Another reason why the question “are house prices going down?” doesn’t have a simple yes-or-no answer is that price trends vary significantly by region.
Yes, most forecasts expect UK house prices to go up in 2026, with experts predicting modest growth rather than a sharp rebound, reflecting improving affordability but a still price-sensitive market.
However, house price forecasts were made before the emerging conflict in Iran, which is likely to push inflation higher. As a result, the Bank of England is increasingly unlikely to cut interest rates. Indeed, mortgage rates have already begun to rise. If this puts off buyers as a result, this could put downward pressure on house prices.
What could affect a rise or fall in house prices:
Risks to be aware of
Despite their limitations, expert house price predictions are useful if you’re keen to understand what is likely to happen this year so let’s take a look.
UK housing market predictions at a glance:
Most forecasts expect UK house prices to rise gradually over the next five years, rather than boom or crash. The consensus among major forecasters is for steady, moderate growth, supported by easing affordability pressures, falling interest rates and the UK’s long-term shortage of housing.
For example, this is Savills’ 5-year house price forecast:
| Year | House price forecast |
|---|---|
| 2026 | 2% |
| 2027 | 4% |
| 2028 | 5% |
| 2029 | 5.5% |
| 2030 | 4% |
KEY INFORMATION
If you’re reading this wondering whether to move home this year and “time the market” right, then a word of warning: if you’re in the market for a home to live in, and you find one you like, and that you can see yourself staying in for a while, and can afford it without too much of a struggle, then trying to second-guess house price indices is a waste of your time.
But, if you do want to ponder the point of a house move further, then have a read of our latest analysis in Is now a good time to buy a house? and Should I sell my house now?
A national survey of 2000 UK adults carried out by the HomeOwners Alliance in February 2026 found that 47% of Brits overall expect house prices to rise this year, while about a quarter (24%) think they will stay the same and only 9% think they will fall. The remaining 20% don’t know what to expect in terms of house prices.
Those who aspire to own their first home, are more likely than existing homeowners to expect house prices to go up this year (65% vs 47%). While existing homeowners are more likely than aspiring homeowners to expect house prices to remain steady (29% vs 16%).
Over the last 5 years, UK house prices have risen steadily, despite increased mortgage costs driven by interest rate hikes. The current average UK house price is just under £270,000 Land Registry data shows.
Looking at national house price predictions and trends is useful but there are regional variations in house prices so an area by area overview can help you understand how prices have changed near you. Below are the latest regional shifts and we’ve pulled together a report on the cheapest places in the UK.
According to Land Registry data, House prices across the UK were down -0.3% in January.
Over the last 12 months, house prices are up +1.1% in England, +1.3% in Scotland, +2% in Wales and +7.5% in Northern Ireland according to the January 2026 Land Registry data.
There is a north-south divide in terms of house price growth in England. Areas in England with a fall or slowest annual growth in house prices include: London (-1.7%), South East (-0.5%) and the South West (-0.1%). The highest rate of annual house price growth is in the North West (+3.1%) and Yorkshire & Humber (+3.0%).
| UK Region | Monthly change | Annual change | Average price |
|---|---|---|---|
| England | -0.2% | +1.1% | £290,437 |
| Northern Ireland | +1.4% | +7.5% | £195,936 |
| Scotland | -0.3% | +1.3% | £187,716 |
| Wales | -1.7% | +2.0% | £210,186 |
| East Midlands | -0.4% | +2.1% | £241,497 |
| East of England | -0.2% | +1.2% | £336,455 |
| London | +0.8% | -1.7% | £554,422 |
| North East | -2.8% | +2.2% | £158,295 |
| North West | -0.8% | +3.1% | £214,443 |
| South East | +0.4% | -0.5% | £379,532 |
| South West | +0.0% | -0.1% | £301,518 |
| West Midlands | +0.3% | +2.4% | £247,251 |
| Yorkshire & Humber | -0.5% | +3.0% | £206,470 |
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The Bank of England had been expected to cut interest rates further in 2026 which will reduce mortgage costs. However, these mortgage rate predictions have taken an about-turn due to the conflict in the Middle East, which has pushed up oil and gas prices and has meant the Bank of England held interest rates in March. Experts predict that increases to fixed mortgage rates are very likely to continue for now. For advice on what to consider, read our guide on Mortgage advice for first time buyers.
Stamp duty changes that came into force on 1 April 2025 have made buying a house more expensive for many homeowners. First time buyers now pay stamp duty on properties over £300,000 instead of the previous threshold of £425,000. While home movers now pay stamp duty on properties over £125,000 rather than the previous threshold of £250,000.
Estate agents currently report that the number of homes for sale on their books is at an 8 year high. With buyer choice higher than usual, the market is considered to be very price-sensitive.
However, there is still an overall shortage of houses generally in the UK keeping house prices up. In Labour’s manifesto ahead of the 2024 General Election, the party set out its plan to restore mandatory house-building targets and pledge to build 1.5 million homes during its term.
The government is aiming for 370,000 new homes to be built in England every year. If the government does manage to consistently build hundreds of thousands of new homes annually, it’s likely that house prices will come down over the long term. But given how long it takes to build houses this would be unlikely to have an impact on house prices in 2026.
The wider economic climate plays an important role in shaping house prices. Rising cost of living, unemployment or weaker wage growth can reduce buyer demand and affordability, while global economic conditions can also affect the UK economy and confidence in the housing market.
Unemployment — it climbed to its highest level in nearly five years: 5.2% in the three months to December 2025, from 5.1% in the three months to November, the Office for National Statistics (ONS). A survey of 48 economists by The Times suggests unemployment could rise further, with two thirds expecting it to reach between 5% and 5.5% by the end of the year, and 15% forecasting a rise to between 5.5% and 6%.
During the 2008 financial crisis, unemployment rose from 5.1% to 7.9% between January 2008 and May 2009, while average UK house prices fell from £171,000 to £145,000.
Paula Higgins, CEO of the HomeOwners Alliance, told Thisismoney that: “Labour-market shocks can be particularly damaging to housing because job losses reduce buyer demand and increase forced sales at the same time.
“This is a far more destabilising combination than interest-rate rises alone, which mainly affect affordability and are often cushioned by fixed-rate mortgages. If unemployment continues to trend higher, it would increasingly undermine confidence and households’ ability to buy due to weaker job security.
“Rising unemployment does affect confidence and can make households more cautious about moving, but the current situation still looks very different from past periods when house prices fell sharply.
“Most major UK house price indices are forecasting modest growth this year, supported by improving affordability as earnings growth continues to outpace house price growth and edge down.
“There is also evidence that some buyers paused decisions during the prolonged period of Budget speculation and are now returning to the market, with the tax changes announced unlikely to have a material impact on the majority of transactions.”
Another factor that may affect house prices in 2026 is political instability. So, if there’s a change in prime minister, depending on who it is and how markets react to their appointment it could have an impact on house prices.
For example, if the change results in higher gilt yields, this would in turn feed through into higher mortgage costs, which then affects how much someone can borrow on a mortgage and therefore pay for a house.
Mortgage affordability shapes the housing market, and rate forecasts shifted sharply in March 2026. Just weeks ago, lenders were cutting fixed rates as the interest rate outlook improved, with further declines expected through 2026. However, forecasts have since reversed due to the Middle East conflict, which has driven up oil and gas prices. Read our guide on Mortgage rate predictions which outlines the latest on what’s forecast to happen and the factors that could disrupt that.
Also, read our guide on How much can you afford to borrow for a mortgage and to see instantly how much you may be able to borrow based on your income, use this how much can I borrow for a mortgage calculator.
Get fee free mortgage advice from our partners at L&C. Use the online mortgage finder or speak to an advisor today.
While slower house price growth evidenced in 2025 may disappoint some existing homeowners, it’s welcome news for first-time buyers.
Halifax says: “Comparing property prices to average incomes, affordability is now at its strongest since late 2015. Taking into account today’s higher interest rates, mortgage costs as a share of income are at
their lowest level in around three years.”
Nationwide says: “First-time buyer share of house purchase activity in 2025 was above the long run average, supported by easier credit availability, with the share of high loan to value lending (i.e. with a deposit of 15% or less) reaching its highest level for over a decade.”
But getting on the housing ladder is still a challenge. There is some help at hand when it comes to buying your first home.
There are a number of schemes to help you buy a home including:
Get fee free mortgage advice from our partners at L&C. Use the online mortgage finder or speak to an advisor today.
Most experts are predicting steady house price growth in 2026 in the region of +2%.
Yes, potentially. There are lots of factors to take into account – and not just economic factors and house price predictions. Assuming you can afford to buy a home, when you decide to do it is a personal decision based on a myriad of personal factors. Read our guide Is now a good time to buy a house which covers everything you need to consider.
Homes with a high energy efficiency are more desirable for some buyers as it means energy costs will be lower. There is also government help available to make your home more energy efficient – see our guide on Energy bills help.
Savills‘ house price prediction for the next 5 years is that the average UK house price will rise by a total of 20% by 2030.
When the Bank of England cuts interest rates, mortgage rates normally fall too. And if the cost of borrowing falls and people can afford to borrow more on a mortgage, the house price forecast would be that prices could rise as a result.
In the last couple of years, various predictions of a house price crash were being bandied about. But as the figures show – this didn’t happen. There are no current indications that a house price crash is likely to happen.
Yes, house prices have gone up in 2025 and are expected to rise gradually in 2026. Our monthly House Price Index indicates that house prices across the UK increased 1.2% over the past year.
However, this is a UK average and what happens with house prices can vary significantly depending on where you live. For example, annual house prices are up 3.1% in the North West and down -1.7% in London. For more comprehensive information on what’s happening near you, read our House Price Index.
No. While some indices show small month-to-month falls, this does not mean UK house prices are falling overall. Annual data from the Land Registry shows prices are still higher year-on-year, confirming the market is adjusting rather than declining.
Yes. Most major forecasts expect house prices to rise in 2026, typically by around 1%-4%, this will depend on what happens with mortgage rates, earnings growth and affordability. Modest growth rather than a boom is anticipated.
A widespread house price crash is highly unlikely. There is no evidence of a house price crash in current forecasts. Unlike past downturns, unemployment remains relatively low, forced sales are limited and most homeowners are on fixed-rate mortgages. All major indices expect stable or rising prices, not a sharp fall.
However, some markets, such as prime central London and flats in desirable parts of London have seen some sharp drops. Some experts argue that these markets are seeing a house price crash, although this is a localised issue.
HomeOwners Alliance Ltd is registered in England, company number 07861605. Information provided on HomeOwners Alliance is not intended as a recommendation or financial advice.
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