The property market has taken a different course from the one many forecasters expected at the start of 2026. The prospect of cheaper mortgages and stronger price growth has given way to higher borrowing costs, more competition among sellers and renewed pressure on rents, mostly due to the Iran/US war which was started in February 2026.
Despite all of these factors, people are still moving – and investors are still investing. Here’s our latest summary of what’s happening in the property market.
Are property prices going up or down?
It depends on where and what you are buying or selling.
The government’s UK House Price Index shows average prices increased by 1.4% in the year to July 2026, to around £273,000. England recorded growth of 1.1%, and Wales 2.6%.
Within England, the North East recorded annual growth of 4.9% and the North West 4.4%. In contrast, prices were down 3.3% in London and 0.2% in the South West, while the South East was almost flat at +0.2%. Property type matters too: UK semi-detached prices rose 2.9%, but flats and maisonettes fell 2.4%. [1]
Overall, for those living in the more affordable areas in the Midlands, North, Wales and Scotland, property prices, for most, are still rising. However, higher mortgage costs are having a greater effect where prices and borrowing requirements are more difficult such as in the South, making it harder for buyers to stretch their budgets.
To understand what’s happening to the price of a property you would like to buy or sell, it’s essential to talk to an expert local agent. They can explain what’s happening to similar properties in the area, which may be very different from the headlines and average figures reported in the media about prices and rents.
A competitive asking price can help sellers attract a buyer
Currently buyers are seeing more choice of properties to buy than they have for a long time. However with a cost of living crisis, higher mortgage rates and suggestions that these might rise over the coming months, buyers’ budgets are constrained.
This doesn’t mean it’s difficult to sell, it just means you need to set the asking price right from the start. The longer a property sits on the market and the more price reductions it has, the harder it can become to sell. Buyers can use the internet—and increasingly AI—to compare your home with similar properties that have already sold, as well as others currently available.
Any landlords who may decide to serve notice on contract holders need to be very motivated and committed to sell, given that we're currently seeing 50% of sales agreed reach the point of exchange.
For sellers in general, ask your local, qualified agent to show you comparable homes they have recently found buyers for, what they achieved and which remain unsold. If viewings or offers are disappointing, review the price, photos and property description and buyer feedback to date.
For buyers, greater choice can create opportunities, but it doesn’t mean every seller will or can afford to accept a large discount. Check your mortgage budget before viewing and assess each property against local evidence. In sort after areas, a well-priced home may still require you to move quickly.
Are you researching or ready to move?
The Autumn Sales Report by our umbrella company, LRG, surveyed 769 buyers, sellers and prospective movers across England. It shows that moving decisions often start long before a property reaches the market: 40% considered moving for at least a year before contacting an agent, including 22% who thought about it for more than two years.
The reasons that people move include personal circumstances as the top reason for buying or selling.
Finding the right property: 34%
A change in family or personal circumstances: 31%
Retirement or a change in lifestyle or location: 30%
The reasons people hold off moving tend to be:
54% said the overall cost of moving had nearly stopped them or was holding them back
37% found it difficult to find the right property and
26% were uncertainty about the economy, interest rates or possible tax changes.
Moving home when you have to make so many difficult decisions means it is worth getting some free advice from a expert agent while you are still weighing up your options. An early valuation of your existing home, a mortgage discussion with a broker and help working out your moving-cost budget can establish whether a move is achievable, well before you look seriously at buying or selling a home.
And, with the government’s current plan to improve buying and selling, it seems that anything that improves the certainty of moving home would be welcome. Our latest survey highlights the value of preparation. Of 553 respondents 82% said having key information upfront, such as a survey, legal pack and chain details, would give them more confidence and 41% would be likely to offer sooner, while 41% would offer with greater confidence but not necessarily sooner.
Will prices and mortgage costs rise or fall next?
Currently, the main risk to the property market being discussed is the Middle East conflict, with higher energy costs putting pressure on inflation and increasing expectations of a rise in interest rates. A rise from 3.75% to 4% in November is being mooted, but is still not certain.
If energy pressures ease and confidence returns, activity could pick up. This may happen regardless of interest rate movements if the government’s newly announced Your First Home scheme encourages eligible first-time buyers back into the market, although we’ll have to wait for further details in October’s Budget.
For re-mortgagers, if your existing deal is ending in the next 6 to 12 months, it’s worth seeking advice early. For movers, waiting for lower prices may not help if borrowing becomes more expensive in the meantime. The experts at our sister company, Mortgage Scout, will be happy to have a no-obligation chat with you to help you understand your options.
What is happening to rents?
Rental supply continues to tighten: available homes were 3% lower than a year earlier, and the flow of homes coming onto the market is down 6%. Higher mortgage rates are also keeping some would-be first-time buyers renting for longer. [2]
As with property prices, local differences remain important to understand. Annual rental growth was 2.1% in the South East, 2.8% in the South West and 2.9% in London. Bristol recorded 3.9%, while Nottingham’s rents fell 0.8%.
It’s likely that UK annual rental growth versus 2025 will reach 2-3% by the end of 2026 if current trends continue. [2]
Renters’ Right Act changes are starting to show results
LRG’s Summer Lettings Report draws on responses from 717 landlords and 860 contract holders and looks at the practical adjustments following recent rental reform affecting England.
Deposits remain a significant hurdle for some contract holders. Some 21% of contract holders said raising their last deposit required borrowing or delaying other spending; another 11% said it nearly stopped them moving. Meanwhile, 38% were unaware of their right to challenge deposit deductions through the tenancy deposit scheme which could help reduce some of the affordability pressures.
The landscape for referencing and guarantors has changed. Employment status and income were the most important application factor for 40% of landlords, followed by their agent’s referencing report for 39%. Most contract holders—82%—said they had never been refused a property because of referencing. However, 54% of landlords said they were more likely to request a guarantor from borderline applicants following the changes in the Renters Rights Act.
Pets matter too! Although 93% of landlords had received no formal written pet request since 1st May, 34% of contract holders said they would only consider a property where pets were permitted. Not all properties will suit a pet, but for those that do, good pet owners often make great long term contract holders too.
Aside from our lettings report data, in practice, we’ve seen that the impact of contract holder notices moving to two months means that stock is available for longer. There are more viewings but it’s taking longer to tie up deals, so it’s important landlords remain aware of the price sensitivity when putting a property back on the market.
Regarding challenges on rent increases reaching First Tier Tribunal – these have been much fewer than anticipated thus far.
For landlords, structured checks should help establish whether a tenancy is affordable. The survey found that 37% already had rent guarantee insurance and 19% were actively considering it, although suitability depends on the cover, conditions and cost. It’s worth exploring the protection and support available to you, as more services become available to help landlords in England manage the Renters’ Rights Act changes.
Whether you are investing, moving or renting, the aim is to find a property and financial commitment that work for your circumstances. Speak to your local sales or lettings team about comparable properties, current demand and your next steps.
Sources
[1] HM Land Registry, UK House Price Index summary
[2] Zoopla, UK Rental Market Report: September 2026
