An unexpected real estate bounce back for 2026
January is historically a quiet time in real estate, but there are ‘green shoots of recovery’ emerging, after Nationwide announced the average price of a UK home rose by 0.3% last month, after a surprise fall in late 2025.
Latest data released, shows that UK house prices climbed in January after a surprise fall at the end of last year, and more importantly are predicted to gain traction during 2026, according to a statement from the UK’s top mortgage lender.
Predictions of ‘stagnation’ for 2026 have been superseded by analysts forecasts of a 2%-4% rise in residential value in the UK.
Rob Prince, Managing Director of Burlingtons Real Estate said “Chancellor Reeves announced a new council tax surcharge on houses worth £2m or more, but stopped short of more widespread levies on homes, which has at least brought clarity for many. There remains the probability for another 2 interest rate cuts later this year in Q3 and Q4, which is perhaps smaller and later than originally predicted. This action will provide a greater choice in the market for funding as lenders fight for a share of the market”
After careful consideration, the Bank of England cut interest rates from 4% to 3.75% in December, after official data highlighted that inflation fell in November to an annual rate of 3.2%, from a recorded 3.6% in October.
The positive outlook is also shared by economists and experts, that 2026 will be a year of growth in the UK’s property market, due to a combination of mortgage interest rate falls and the uncertainty around the budget now settled.
Halifax – expects prices to rise between 1% – 3% this year.
Nationwide – forecasting growth of 2% – 4% in 2026.
Rightmove – recorded a 2.8% increase in listing prices in January 2026.
Savills – predicts UK house prices to rise by around 2% in 2026 (revising its longer-term forecast to nearly 25% cumulative growth by 2030).
