House Prices in 2026 – What the Data Actually Shows

Transcript

Hi, I’m Ruban Selvanayagam from Property Solvers.

A lot of decisions in property – especially around pricing and when to sell – get made on assumptions about where house prices are going, how buyers are behaving, and what the market is really doing.

In this video, I want to step back and look at What the Data Really Shows About UK House Prices as We Move into 2026 – pulling together completed sales, transaction volumes, affordability, supply, development viability and mortgage conditions.

The aim here isn’t to predict headlines. It’s to understand what buyers are actually doing – and what that means for buying and selling in the current housing market.

Let’s dive in…

As we head into 2026, it’s worth recognising that the current property cycle is one of Adjustment Rather than Crisis.

This isn’t a post-boom hangover in the traditional sense, and it isn’t a shock-driven collapse either. It’s a market recalibrating after the post-Covid surge, the 2022 bond market shock, and a sharp reset in interest rates.

Add to that higher build and labour costs, wider inflationary pressures, tighter affordability and shifting regulation – pressures that have reshaped behaviour across the market over the past few years.

That distinction matters, because markets that are adjusting behave very differently from markets that are breaking.

So when people talk about a house price crash, it’s worth being clear about what they usually mean, because the term gets used very loosely.

In most cases, a crash implies a sharp, fast, nationwide fall in achieved prices – 15 or 20% or more – happening over a relatively short period of time.

Historically, that sort of outcome tends to require a very specific set of conditions. You normally need a surge in forced sellers, a sudden contraction in mortgage credit, or a meaningful shock to employment and household incomes – like we saw during 2008 and 2009.

Without those ingredients, the UK housing market doesn’t usually collapse. What it tends to do instead is slow down, grind sideways, and then reprice unevenly across different regions and property types.

Very often, the bigger adjustment happens in real terms rather than nominal terms, with inflation and earnings rising while headline house prices go nowhere.

So the real question as we head into 2026 isn’t “Crash or No Crash”. It’s where pressure is building, where support is holding, and how those forces interact.

If we start with the most robust evidence available – completed sales rather than asking prices – the picture is fairly clear.

Data from the Office for National Statistics and HM Land Registry, based on the UK House Price Index for October 2025 (published in December), shows annual UK house price growth of 1.7% with the average UK price around £270,000.

Completed prices have flattened in many areas and growth has cooled sharply elsewhere, but there is no sign of a broad-based collapse in achieved values.

In fact, the weakness is concentrated in higher-priced markets, with London down around 2.4% year-on-year (according to the same Land Registry data), while much of the rest of the country remains broadly flat to modestly positive.

That distinction matters, because completed sales reflect what buyers have actually been willing and able to pay – not what sellers hope to achieve, and not what headline sentiment might suggest.

The picture is somewhat reinforced by the latest lender index data.

In December 2025, Halifax reported a 0.6% monthly fall and just 0.3% annual growth in house prices, while Nationwide’s index showed prices down 0.4% on the month with annual growth at around 0.6% – the slowest since April 2024.

These indices aren’t perfect, but when they broadly agree with each other and with official completion data, it usually tells you something important. In this case, they’re all pointing in the same direction. Momentum has stalled, but it hasn’t reversed.

Mortgage approvals help explain why.

Latest Bank of England Money and Credit data (October 2025) shows net mortgage approvals for house purchases at 65,018 in October 2025, slightly down from September but still above market expectations for that month.

Approvals for remortgaging also fell to 33,100, while effective mortgage rates on new lending eased slightly to around 4.17% – the lowest since early 2023, suggesting some capacity and confidence among qualified buyers even as affordability constraints persist.

So demand for housing is still there – the approvals data shows that clearly – but buyers are far more price-sensitive, constrained by affordability tests and higher borrowing costs than during the ultra-low-rate era.

One of the most important dynamics in the current market isn’t price, but liquidity.

Over the last couple of years, a growing number of homes have not sold at their initial asking price. More properties have been reduced, re-listed, or quietly withdrawn after extended marketing periods.

Many properties are being reduced, re-listed, or quietly withdrawn after extended marketing  periods. According to Zoopla Research, homes that require an asking price reduction take about 2.4 times longer to sell than those priced realistically from the outset.

That gap between asking prices and achieved prices is precisely what our Asking vs Sold Price tool at Property Solvers is designed to show.

It uses Land Registry completion data to show what comparable homes have actually sold for locally, rather than what sellers are hoping to achieve.

In a market like this – where Buyers are Active but Highly Price Sensitive – understanding that difference can be the key to selling quickly rather than chasing the market down through reductions.  I’ll be sure to add the link in the show notes.

So… This is where a lot of crash narratives take hold, because rising reductions and withdrawals look dramatic on the surface. But the mechanism underneath matters.

A market dominated by forced selling behaves very differently from a market dominated by optional sellers. At the end of 2025 and moving into the new year most sellers still have a choice. If they don’t achieve the price they want, many simply sit tight, withdraw the property, or delay the decision rather than sell at a level they’re uncomfortable with.

That behaviour stretches transaction times and increases the visible stock of unsold homes, but it doesn’t automatically translate into falling achieved prices. Instead, the market clears slowly. Only realistically priced homes transact. Everything else lingers.

This is why unsold stock can rise sharply without triggering a collapse. It reflects Hesitation and Price Discovery, Not Panic.

It also explains why prices can remain broadly stable even when confidence feels weak.

According to UK Finance data covering 2024 and the first three quarters of 2025, mortgage repossessions remained below 10,000 cases per year, less than a quarter of post-financial-crisis levels.

Despite some growing concerns about the longer-term impact of AI and automation on certain parts of the labour market, there has been No Surge in Unemployment and No Sudden Withdrawal of Mortgage Credit.

Without those pressures, sellers are not being compelled to accept deep discounts.

Buyers Negotiate Harder. Deals Take Longer to Stitch Together. Fall Throughs Increase. The Gap Between Asking and Achieved Prices Widens. But nominal values don’t collapse.

It’s also important to remember that the UK is not one single housing market. National averages hide significant divergence.

ONS and Land Registry regional data through 2024 and 2025 shows that in higher-priced parts of southern England, affordability constraints are more binding, stock levels are higher, and price sensitivity is greater. In more affordable regions, demand remains more resilient and price performance has held up better.

Property Type Matters As Well. Flats behave differently from houses. New-build stock behaves differently from second-hand homes. Compromised or complex assets behave very differently from straightforward, mortgageable stock.

Outcomes in 2026 will depend far more on local incomes, local supply, buyer composition and mortgageability than on any national headline. Two sellers with superficially similar homes can experience very different markets depending on where they are and how realistically they price.

Affordability sits at the centre of this adjustment, but affordability is often misunderstood.

It isn’t just about price-to-earnings ratios. It’s about monthly repayments, stress testing, deposits, stamp duty, childcare costs and wider household budgets.

According to UK Finance data published in 2025, first-time buyers are now spending around 20–25% of gross household income on mortgage repayments, compared with materially lower levels during the ultra-low-rate period from 2013 to 2021.

The mortgage market itself has also become more segmented.

Many Existing Homeowners Sit on Relatively Low Loan to Value Mortgages Taken Out Before 2022 (with Substantial Embedded Equity). First-time buyers, by contrast, often operate at much higher loan-to-value levels and are far more sensitive to rates, deposits and upfront costs.

That split matters, because it means activity can recover without translating into broad price inflation. Demand can return, but prices remain capped.

Tax policy reinforces that pattern.

Recent budgets in 2023, 2024 and 2025 avoided sudden or dramatic changes to stamp duty, but they did confirm the reversal of the temporary post-2022 thresholds in April of last year. Since then, stamp duty bands have remained fixed in cash terms.

That creates what’s known as fiscal drag – as prices and incomes rise, more buyers are pulled into higher tax bands even though the rules haven’t changed – which quietly increases transaction costs and discourages discretionary moves, particularly at the upper end of the market.

The practical impact is that higher-value stock becomes more sensitive to pricing and sentiment, while the mid-market – where affordability still broadly works – remains more resilient.

On the supply side, Planning Remains a Genuine Constraint.

Decision backlogs, appeals and stretched local authority resources through 2024 and 2025 continue to slow delivery. That matters because Development Viability is Highly Sensitive to Time. Longer programmes mean higher finance costs, higher exposure to cost inflation, and greater risk.

Even in a flat pricing environment, those factors can be enough to stall schemes.

This is one of the most important points to understand when people talk about crashes. The Slowdown is Happening at the Viability Stage, not at the Resale Stage. Projects are being delayed, resized or shelved before homes ever come to market.

Longer-term research from Savills, published across 2024 and 2025, reinforces this view. They’ve been clear that the UK housing market has moved into a lower-growth phase structurally, with future price growth much more likely to track earnings over time rather than deliver strong real-terms gains.

That isn’t a collapse scenario. It’s a reset.

Savills also highlight the scale and stickiness of the UK housing stock, with ownership heavily concentrated among older households with low or no mortgage debt. That structure limits forced selling and helps explain why price adjustment in the UK tends to be slow and uneven rather than sudden and dramatic.

Build costs remain a major pressure point within this environment.

Labour, materials, energy and compliance costs have all risen since 2020, and for many small and medium-sized developers they now pose a bigger risk to viability than interest rates.

New-build delivery figures underline this point. New Home Sales are Well Down Compared with Recent Averages, and housing starts remain far below long-term targets. That isn’t because people don’t need homes – it’s because schemes don’t stack up on current assumptions.

First-time buyers play an important role in this picture. They account for a large share of transactions in 2024 and 2025, and improved mortgage conditions have increased borrowing capacity for some.

But higher upfront costs mean that extra capacity doesn’t simply flow into higher prices.

Instead, buyers adjust what they buy and where they buy. That reinforces regional divergence and increases the penalty for unrealistic pricing.

Landlords sit within this adjustment as well.

Regulatory changes – including the Renters’ Rights Act, which is expected to come into force from May 2026, alongside tighter EPC requirements and measures such as Awaab’s Law – have materially altered the economics and risk profile of buy-to-let.

Taken together, these changes increase compliance costs, operational risk and capital requirements. As a result, landlords now need significantly more margin to justify holding rental property, particularly where yields are already thin.

For some landlords – especially smaller operators, those with higher leverage, or those in lower-yielding areas – the numbers simply don’t stack up in the same way they once did.

As a result, more rental properties are coming to market for sale in certain segments. But again, the mechanism matters. This is largely discretionary selling, not distress.

That adds supply in specific parts of the market, particularly typical first-time buyer stock, but it doesn’t create the conditions for a rapid, nationwide repricing.

Now, Property Solvers are not in the business of predicting house prices. As professional homebuyers, we focus on what the market is doing now – using completed sales, real transactions and buyer behaviour – because that for us is what actually determines value on the ground.

Nonetheless it’s worth taking a look at what the major forecasters – lender indices, institutional research and official data – are predicting.

What’s striking isn’t disagreement, it’s convergence. Most forecasts published towards the end of last year point to between 0% and 3% nominal house price growth in 2026, not a national crash.

But remember that whilst forecasts are useful context, even the best ones get revised, particularly over shorter timeframes.

So when you pull all of this together – completed sales data from ONS and the Land Registry, flat momentum from Halifax and Nationwide, rising unsold stock and withdrawals, constrained supply, and a landlord sector that is adjusting rather than capitulating – the picture becomes much clearer.

The market is absorbing change through slower turnover and tougher pricing discipline, not through widespread distress.

Drawing this video to a close, and going back to my initial question – What Does the Data Actually Say as We Head into 2026?

It shows a housing market that has slowed, not collapsed. Prices have stalled rather than fallen. Transactions are holding up reasonably well. Supply is constrained by viability and planning, not by a lack of need.

Outcomes will be driven far more by local fundamentals, affordability mechanics and execution than by national averages or dramatic predictions.

For developers, landlords and sellers, the implications are straightforward.

Underwrite conservatively. Assume longer timelines. Treat build costs and viability as the main battlefield. Focus on mid-market product aligned with real incomes.

And don’t rely on hope-led pricing or a last-minute market bounce to make deals work.

A crash makes for a neat headline, but it’s rarely how the UK housing market actually adjusts. What this environment rewards is discipline, realism and a clear understanding of how the market is really functioning.

A big thanks for watching to the end – and if you’ve found this useful, please like and subscribe. I’ve also linked our Property Solvers Auctions and Property Solvers Investors YouTube channels in the show notes if you’d like to follow more of our work.

Wishing you a Very Happy New Year!