The Latest UK Property Market Update. The housing market is steady but cautious
The UK housing market has faced ongoing disruption over the past four years, and 2026 has continued that trend despite hopes for a calmer period.
As noted by Savills and echoed across the industry, earlier expectations of easing inflation and falling mortgage rates have been challenged by renewed global uncertainty, particularly tensions in the Middle East, which risk keeping inflation higher for longer.
Navigating the current market
Against this backdrop, thousands of landlords and first-time buyers are trying to navigate a market shaped by the Renters’ Rights Act, elevated interest rates, tax uncertainty, and tighter mortgage lending criteria. At the same time, ongoing political debate around planning reform and housing supply, alongside increasing regulation for landlords, is adding further pressure and uncertainty to an already constrained market. This leaves many asking: where do we go from here?
At present, according to Rightmove, market activity remains steady, with sales supported largely by existing mortgage holders, although buyer demand has softened as some pause their plans. Mortgage rates have risen by around 0.4%, reducing the availability of sub-4% deals, while house price growth remains modest at around +1.3%.
In summary, Rightmove reports that the market remained relatively stable in April despite rising borrowing costs and global uncertainty. Average asking prices for new sellers rose by 0.8% (around £2,929) to £373,971, broadly in line with recent months, but still below the usual seasonal uplift. At the same time, the average two-year fixed mortgage rate climbed to 5.42%, up from 4.25% before the onset of the Iran conflict, adding roughly £235 per month to a typical new mortgage.
The Bank of England’s position
With the Bank of England holding its base rate at 3.75%, and future movements still uncertain, the central bank is maintaining a cautious and steady stance. While external factors such as oil prices continue to influence the broader inflation outlook, the market is still adapting, showing a degree of resilience in the face of ongoing uncertainty.
Signs of resilience are also evident in mortgage and sales data. As referenced by Connells Group, mortgage rates rose sharply in March, with 83% of home movers agreeing deals above 4%, up from 58% in February, and the average new purchase rate reaching 4.57%, its highest level since last April.
Despite this, the market has remained relatively robust. Property Industry Eye reports that sales across Great Britain fell by just 2% year-on-year, suggesting demand has softened but remains strong by historical standards, with buyer registrations still 17% above pre-pandemic levels seen in March 2019.
First-time buyers continue to play a key stabilising role, accounting for 34% of all sales in March, the highest share for that month since 2006, benefiting from comparatively smaller rate increases than other buyer groups. Overall, while higher borrowing costs have introduced pressure, activity levels suggest the housing market is holding up better than expected.
The House Price Index
Rightmove’s House Price Index notes that price growth is strongest in areas less exposed to higher borrowing costs, with Scotland standing out, recording an average annual price growth of over 4%. As Rightmove property expert Colleen Babcock highlights, competitive pricing remains essential for sellers this spring, particularly as affordability pressures persist. While higher mortgage rates continue to weigh on budgets, many buyers are being supported by rising wages, softer house prices, and more flexible lending criteria, helping to offset some of the pressure.
The rental sector
The rental sector faces further structural change. Industry commentary suggests upcoming and recent rental reforms will significantly reshape how landlords operate, including the abolition of Section 21, stricter reliance on Section 8 with defined grounds, limits on rent increases to once per year linked to market rates, and tighter compliance requirements that may delay possession if not met correctly.
Looking ahead
As the market moves through the remainder of 2026, resilience continues to define both the sales and lettings sectors, even as affordability pressures, regulatory reform, and economic uncertainty remain firmly in focus.
For buyers, sellers, landlords, and investors alike, success will depend on informed decision-making, realistic pricing, and the ability to adapt to changing market conditions. While challenges are likely to persist in the months ahead, underlying demand, continued housing shortages, and improving wage growth suggest there are still opportunities for those prepared to navigate the market carefully.
Whether you are considering your next move, reviewing your investment strategy, or simply looking for guidance in an evolving landscape, our team is here to help you make confident and well-informed decisions.
