"We predict the market will look and feel very different depending on which area of Great Britain you're in, and the type of property you're looking to sell or buy, with big differences particularly between the south of England and the rest of Great Britain"
- Colleen Babcock - Rightmove
House prices are set to rise 2% nationally in 2026 after an unexpected 0.6% fall this year, according to Rightmove's latest market forecast.
The property portal expects regional variations to dominate, with lower-priced markets in Scotland, Wales and northern England proving more resilient than London and southern England. The prediction draws on data covering more than 90% of the market, utilising a house price model powered by millions of supply, demand and pricing datapoints alongside insights from a panel of experts.
Rightmove anticipates the 2026 market will resemble the second half of 2025 rather than the first, with improved buyer affordability and strong choice of homes for sale supporting modest price growth. The year just ending proved a tale of two halves, with Budget-related uncertainty dampening activity after an encouraging start.
Regional performance will vary significantly depending on local affordability, supply and demand dynamics, and government policy effects. Property type also matters. In 2025, large homes, particularly detached properties, performed more strongly while smaller properties, especially flats, saw slower price growth.
The traditional Boxing Day bounce in home-moving activity could be amplified this year by movers who paused plans during Budget uncertainty. A Rightmove survey of over 10,000 potential movers found one in five were waiting to see the Budget outcome before resuming plans. Many of these "Budget-pausers" are expected to become "Boxing Day-bouncers" as they restart their journeys.
First-time buyers could emerge as the main beneficiaries of 2026 market conditions. Average wage growth is anticipated to outpace house price growth, improving affordability, while many will benefit from being able to borrow more due to Loan-to-Income and stress rate changes. The high number of available homes will maintain buyer's market conditions, giving first-time buyers more negotiating power.
Rental market dynamics may also help would-be buyers. While rents remain at record levels, yearly rises have been slowing, assisting those saving deposits. If first-time buyers can assemble their deposit, they may find a mortgage cheaper than their rent, particularly if landlords pass on the Budget's 2% property tax increase to tenants.
However, challenges persist. Many first-time buyers will still rely on family help with deposits, while those in southern England continue adjusting to higher stamp duty charges. Mortgage rates, despite their downward trend, remain elevated.
At the opposite end of the market, properties valued at £2 million or above face new headwinds. A Mansion Tax announced in November's Budget will impose an annual charge from April 2028, starting at £2,500 and escalating to £7,500 for homes valued at £5 million or over. The recurring nature of this tax carries long-term implications for both existing owners and potential buyers, potentially creating sluggishness and volatility at the very top end.
Rightmove data shows this affects a small proportion of the market, with around 1% of homes currently priced above £2 million and less than 0.5% of sales in this bracket. Sellers seeking quick sales may reduce prices to drop below the £2 million threshold or by enough to cover a buyer's annual charge.
"2026 will be a mix of some key property market themes continuing, and other new trends emerging," said Colleen Babcock, property expert at Rightmove. "We expect many of those who put their moving plans on hold over the last few months will pick them back up again from Boxing Day and into the new year, now the Budget is out the way."
"We predict the market will look and feel very different depending on which area of Great Britain you're in, and the type of property you're looking to sell or buy, with big differences particularly between the south of England and the rest of Great Britain. The market conditions next year will favour typical first-time buyers over those at the top-end of the market."
"It's positive to see analysis pointing to a housing market that is slowly regaining its footing rather than racing ahead," commented Mary-Lou Press, president of NAEA Propertymark. "A forecast 2% rise in prices reflects improving affordability after a subdued 2025, but also highlights how sensitive the market remains to mortgage rates and policy changes."
The regional divide is set to persist, with more affordable markets expected to outperform areas where higher prices and tax changes continue weighing on demand, she noted. "This underlines the reality of a highly localised housing market."
A post-Christmas bounce appears likely, driven by movers who paused plans during Budget uncertainty, though activity is expected to be led by needs-based buyers rather than rapid price growth, Press explained.
"First-time buyers are well placed to benefit from stronger wage growth, improved affordability, and good levels of supply, while the introduction of the Mansion Tax is likely to add further drag at the top end of the market," she added. "Overall, 2026 appears set to be a year of cautious confidence, with realistic pricing and local market knowledge from reputable property professionals key to success."
