UK Property Market Outlook 2026
2025 proved that the mortgage market doesn’t stop for affordability. Buyers acted early, lenders adjusted, and brokers kept the wheels turning. As we move into 2026, the market isn’t slowing down — it’s recalibrating. The opportunity lies in guiding clients through tighter options, smarter refinancing, and longer-term planning. This article explores the key housing and mortgage market trends shaping 2026, including interest rate movements, refinancing behaviour, and what they mean for brokers, lenders and their clients.
2025: Resilience Despite Affordability Pressures
What we saw across the market was clear: affordability was tight, but it didn’t stop activity.
House purchase lending grew by 22 percent, driven by early-year transactions ahead of April’s stamp duty changes and supported by modest regulatory tweaks. Buyers who could meet affordability criteria stayed active — and with the right advice in place, deals continued to get done.
Refinancing became a bigger part of the picture as the year progressed. As more borrowers reached the end of fixed-rate deals, external remortgaging rose by 17 percent to £71 billion, while internal product transfers increased by 18 percent to £256 billion. Lenders focused on retention, and across the market we helped clients weigh up their options and make informed choices.
Buy-to-let showed resilience too. Despite ongoing tax and regulatory pressures, purchase lending rose by 11 percent to £11 billion, while remortgaging grew by 24 percent to £28 billion. Credit performance remained strong, with arrears falling by 12 percent to 92,100 cases. Possessions edged up to 8,600, reflecting a return to more normal post-pandemic operations rather than any widespread deterioration in borrower behaviour.
Finally, the build-up to the Autumn Budget in 2025 created a period of hesitancy in the housing market, with many potential buyers and sellers pausing activity while they awaited clarity on tax and property-related measures. Surveys and market data showed buyer enquiries and vendor instructions weakening as households and agents adopted a “waitand-see” approach ahead of the government’s fiscal statement, weighing potential changes to stamp duty and other levies. This uncertainty was widely cited as contributing to softer market momentum late in the year, even though the eventual Budget delivered no substantial changes directly affecting the buyer sector.
2026: Mortgage Rates and Refinancing Trends Shaping 2026
2026 will be defined by measured growth and smarter engagement across the mortgage market. We expect affordability pressures to tighten further, keeping house purchase growth to around 2 percent. But this is far from a stalled market. Overall gross mortgage lending is forecast to rise by four percent to approximately £300 billion, underpinned by refinancing activity and improving credit performance.
Rates and refinancing set the rhythm
Now that the Budget has passed and speculative pressure has eased, activity is beginning to return. We are beginning to see that home-movers who paused their plans earlier are returning with renewed confidence, and estate agency partners are reporting an uptick in listings as we move into 2026. This increase in available stock should help translate broader market demand into more units moving through to exchange and completion in the months ahead.
Interest rates remain the primary catalyst. Following the Bank of England’s decision to cut the base rate to 3.75 percent at the end of 2025, further reductions are expected through 2026. Lenders have already begun repricing, and we know from experience that even modest shifts can quickly change borrower behaviour.
This is amplified by the volume of fixed-rate deals reaching maturity. Around 1.8 million are set to expire during the year, creating natural peaks in refinancing activity rather than steady, linear growth. External remortgaging is forecast to rise by around 10 percent to £77 billion, with product transfers increasing by a further 2 percent to £261 billion.8 These moments of choice will shape much of the market’s momentum and determine where time and attention are best spent.
Housing Market Activity and Buyer Behaviour in 2026
House price growth is expected to stay modest, with affordability continuing to cap transaction volumes. UK Finance forecasts suggest property transactions may dip slightly, even as lending rises.9 That imbalance reflects a market adjusting rather than retreating — one where confidence, clarity and timing matter more than pace.
Affordability will continue to constrain purchase volumes, but lower mortgage rates and improving income dynamics should support activity among buyers with clearer budgets.10 First-time buyers and movers who have delayed decisions may find conditions more workable, though activity is likely to remain uneven and regionally driven.
Credit performance continues to strengthen
Encouragingly, underlying credit trends continue to improve. Mortgage arrears are expected to fall by around 5 percent to approximately 87,500 cases, while possessions are forecast to rise modestly to 9,40011 — largely reflecting the resolution of long-standing cases. By historical standards, both remain low, reinforcing the resilience we’re seeing across borrower profiles.
Buy-to-let steadies, but doesn’t stall
The buy-to-let sector is entering a more stable phase. Regulatory and tax changes are likely to limit further growth through purchases but refinancing and portfolio management remain active. Landlords are continuing to reassess borrowing structures in response to rate movements, creating ongoing demand for clear, strategic guidance.
Housing association delivery and new-build activity
Housing associations are moving from planning to delivery phases as 2026 gets underway, with a stronger pipeline of new homes being progressed across the country. What we’re going to see is that providers are increasingly active in bringing forward a mix of affordable, shared-ownership and new-build supply, supported by competitive funding rounds and strategic partnerships aimed at accelerating delivery.
What This Means for Brokers, Lenders and Partners
Nick Hale, CEO of Movera comments:
“What we have noticed is that consumer expectations of conveyancing and remortgage experiences are growing fast. At Movera, we are focused on delivering leading experiences for brokers, consumers, clients and lenders for many years, keeping pace with expectations and striving to lead the way.”
With refinancing expected to arrive in waves, pressure is likely to build at key points throughout the year. Digital processes will help absorb volume, but sharp spikes could still test capacity. Staying close to clients, setting expectations early and working with the right partners will be key to keeping cases moving smoothly.
Overall, 2026 is shaping up to be a year where success is driven less by headline volumes and more by precision. The market is active, the signals are clear, and the real value lies in helping borrowers make confident, well-timed decisions as conditions continue to evolve.
Footnotes
- UK Finance, Mortgage Market Forecast 2026–2027 https://ukfinance-newsroom.prgloo.com/news/uk-finance-mortgage-marketforecast-2026-2027
- Forbes Advisor UK, Mortgage updates and lender rate movements https://www.forbes.com/uk/advisor/mortgages/2026/01/09/mortgage-updates/
- The Guardian, UK house prices could rise by up to 4% in 2026 as interest rates fall https://www.theguardian.com/money/2025/dec/15/uk-house-prices-rise-interestrates-nationwide
- MoneyWeek, Latest UK mortgage rates and market commentary https://moneyweek.com/personal-finance/mortgages/latest-UK-mortgage-rates
- UK Finance, Modest growth forecast for mortgage lending in 2026 https://www.ukfinance.org.uk/news-and-insight/press-release/modest-growthforecast-mortgage-lending-in-2026
- Gov.UK New Homes England 2024 to 2025 housebuilding statistics published New Homes England 2024 to 2025 housebuilding statistics published – GOV.UK
