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UK House Price Forecast 2026: What the Experts Expect

What forecasters expect for UK house prices in 2026, how that compares with the latest ONS figures by region, and what buyers and investors can do with it.

3 November 202612 min readBy PropertyZoom Editorial
UK House Price Forecast 2026: What the Experts Expect

UK house prices are expected to finish 2026 only modestly higher, with most credible forecasts landing between a small fall and a rise of around 4%. The latest official figures sit towards the lower end of that range: the Office for National Statistics (ONS) reported an average UK price of £273,000 in August 2026, up 0.9% on a year earlier. The national average hides large differences, though. London is falling, while Wales and Scotland are growing faster than England. Below, we set out who forecast what, how the real data compares, and how to use all of it when you search for a property.

TL;DR

  • Forecasts for 2026 are spread wide: from a modest fall to growth of 2% to 4%, depending on who is forecasting and when the forecast was made.
  • The ONS says the average UK house price was £273,000 in August 2026, up 0.9% over 12 months (provisional, so subject to revision).
  • Regions are moving differently: England +0.4%, Wales +3.1%, Scotland +2.9% and London -2.2% in the 12 months to August 2026.
  • Mortgage costs, incomes and housing supply are the main drivers, so a forecast is a guide to the direction of travel, not a promise for your street.
  • For your own purchase, local comparison of asking prices, floor area and recent sales matters more than the national headline.

Table of Contents

What the main forecasters say for 2026

The most useful way to read a forecast is to ask who made it, when, and what it measures. Some forecasts cover the calendar year, others the year to the fourth quarter, and others an average across several years. They are not directly interchangeable, which is part of why the headlines look so contradictory.

Here is what the checked sources say:

| Forecaster | What it expects | Period and notes | |---|---|---| | Nationwide | Annual growth broadly in the 2% to 4% range | 2026 outlook, based on improving affordability and modestly lower interest rates | | Capital Economics | About 1.5% higher in Q4 2026 than a year earlier, then 3.5% in the year to Q4 2027 | Outlook dated 21 July 2026 | | Office for Budget Responsibility | House-price inflation averaging just over 2.5% across its forecast period | March 2026 forecast | | HomeOwners Alliance roundup | Its own forecast is a 2% rise; it reports other forecasters from a 2% fall to a 4% rise | Update of 22 October 2026 |

The HomeOwners Alliance roundup is a good illustration of the spread. It describes the 2026 outlook as modest and lists the two big property portals at between a 2% fall and a 0.5% rise, while a building society sits at 2% to 4%. Nobody in that list is forecasting a boom, and nobody is forecasting a crash.

Why forecasts changed during the year

Most 2026 forecasts were first published in late 2025, when mortgage rates were expected to ease further and affordability to improve. Revisions since then have generally moved toward caution. Capital Economics, for example, pointed to about 1.5% growth by the fourth quarter of 2026 and a stronger 3.5% the following year, a pattern many forecasters share: a quiet 2026 followed by firmer growth as borrowing costs fall.

When you see a forecast, check its date. A prediction made in the autumn of 2025 and one made in the summer of 2026 are answering the same question with different information.

What the official data shows so far

Forecasts are opinions about the future. The ONS figures are the best measure of where prices actually stand. In its release of 21 October 2026, the ONS reported an average UK house price of £273,000 in August 2026, up 0.9% over the previous 12 months. The figure is provisional and will be revised as more data arrives.

That 0.9% is below the 2% to 4% range in the more optimistic outlooks, and closer to the cautious end of the roundup. It is also not far from the roughly 1.5% that Capital Economics expected by the final quarter. With two months of the year left, a final 2026 outcome of around 1% to 2% would not be a surprise, though nobody can say for certain.

A practical point: different house price indices use different methods and different data, so they rarely agree to the decimal. The ONS figures draw on a broad set of completed transactions and are published with a lag. Mortgage-lender indices are based on their own lending and arrive sooner. When you compare a forecast with an "actual", compare like with like.

What the official data shows so far

Regional differences: the national average hides the story

The single number for the UK blends very different local markets. According to the same ONS release, in the 12 months to August 2026:

| Area | Change in average house price | |---|---| | Wales | +3.1% | | Scotland | +2.9% | | England | +0.4% | | London | -2.2% |

This is the pattern many commentators described as a divide between the south of England and the rest of the country. London, where prices are highest and affordability is most stretched, has been weakest. Wales and Scotland, starting from lower price levels, have been stronger.

If you are buying or investing, this matters more than the national forecast. A 0.9% national rise is the result of some areas rising at 3% and others falling by 2%. Your relevant forecast is the one for the town, and ideally the postcode, where you are looking.

How to look at your own area

  1. Check recent sold prices on the official Land Registry data for your street and neighbouring ones.
  2. Compare asking prices for similar homes: same number of bedrooms, similar floor area, similar condition.
  3. Watch how long homes take to sell and how often asking prices are reduced. Frequent reductions suggest buyers have the upper hand.
  4. Look at rents in the same area if you are an investor, since yield depends on both price and rent.

On PropertyZoom, you can browse properties for sale with filters and instant comparison, which makes steps 2 and 3 quicker because the essentials sit side by side rather than across a dozen tabs.

What is driving prices in 2026

The OBR's housing analysis names the key drivers: real income growth, housing supply, demographics, mortgage rates and credit conditions. Government policy can also affect both prices and the number of transactions. Its forecast draws on mortgage lending data, Bank of England and UK Finance figures, RICS surveys, housing stock growth, transaction turnover and the effect of planning policy.

In plain terms, four things matter most.

Mortgage rates and credit

Most buyers need a mortgage, so the monthly cost decides what they can pay. Nationwide's outlook argued that improving affordability, with earnings growing faster than prices and mortgage rates easing, should support buyer demand and let activity strengthen gradually. Mortgage experts cited by What Mortgage say that sustained price growth depends on a better inflation outlook and falling mortgage costs.

Incomes

When wages rise faster than house prices, the same home becomes slightly more affordable each year. That is the quiet mechanism behind most of the modest-growth forecasts.

Supply of homes

Prices respond to how many homes are available. The government estimates that England delivered 199,500 net additional homes in the year ending 31 March 2026, and building control data estimated 143,110 new-build completions in England over the same period. These are figures for England only, and they describe what has been built, not a target. The OBR has estimated that planning reforms would reduce the average house price by around 0.8% by 2029 via a 0.5% increase in the housing stock. That is a small effect, and a slow one.

Sentiment and stock

One forecaster that cut its 2026 outlook cited higher mortgage costs, reduced debt availability, weaker sentiment and elevated stock. The same analysis noted that stricter mortgage regulation and widespread fixed-rate borrowing lower the risk of forced sales, which is why a sharp fall is not the central view.

The five-year view

Longer forecasts are less precise, so treat them as ranges. The OBR projects house-price inflation averaging just over 2.5% across its forecast period, and Capital Economics expects 3.5% in the year to the fourth quarter of 2027, which points to a pick-up after a flat 2026. If you buy at the average price of £273,000 and growth averages 2.5% a year, the same home would be worth roughly £30,000 more after four years. That is simple compounding, not a prediction for any specific property.

Two cautions for long-range planning:

  • Forecasts have been revised repeatedly as interest rate expectations moved. Check the date of any projection you rely on.
  • Your return depends on what you pay, what you spend on the home, and when you sell, not only on the market average.

Is 2026 a good year to buy?

The honest answer is that it depends on your circumstances, not the forecast. A year of modest price movement is, for many buyers, a calmer environment to negotiate in than a year of fast growth. Nationwide's view is that activity should strengthen as affordability improves gradually, through incomes outpacing prices and a further modest fall in interest rates.

A sensible way to decide:

  1. Work out your monthly budget first. Use a mortgage calculator with a realistic rate, and add a buffer in case rates are higher when your fixed deal ends.
  2. Plan to stay for several years. With flat or slow growth, the costs of buying and selling take time to recover.
  3. Focus on value in the local market. In a market where London is falling and Wales is rising, the average tells you very little about your target area.
  4. Speak to a qualified mortgage adviser about your own affordability and the products you can access before you commit to an offer.

If you are an investor

Investors should weigh price growth alongside rent and running costs, since a modest-growth year puts more weight on yield. The regions with stronger recent growth, and lower entry prices, tend to attract the most attention. On PropertyZoom you can look at investment listings such as this Manchester new-build three-bedroom house or a five-bed HMO in Chester, and compare them with each other on the details that matter. If shared housing is your focus, the HMO listings page groups them in one place. Always check the local licensing rules and take professional advice before buying.

If you are selling or renting

In a flat market, pricing realistically from day one matters. Homes priced above what comparable properties are achieving tend to sit and then need reductions. If you are renting rather than buying, our properties to rent page lets you filter to your budget and area without wading through duplicate listings.

Our perspective

Forecasts are useful for context, but they are written about the whole country, and nobody buys the whole country. The 2026 figures show it clearly: a national rise of 0.9%, London down 2.2%, Wales up 3.1%. If you made your decision from the headline alone, you would be wrong about almost every individual market.

That is why we built PropertyZoom around comparison rather than prediction. When prices move slowly, the difference between a good and a poor purchase comes down to details: the floor area you get for the money, the condition, the location, and how the home stacks up against others like it. Our platform is designed to put those essentials side by side, so you can compare homes quickly and with less friction than scrolling through long, cluttered listings.

We would encourage buyers, renters and investors alike to use forecasts as one input, then test them against real properties in the places they care about. Residential, commercial, student, HMO and land searches all work the same way: filter tightly, compare directly, and decide with the facts in front of you.

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Compare homes in your area with PropertyZoom

If the forecasts have convinced you that local detail matters most, the next step is to look at actual homes. PropertyZoom is an AI-powered search and comparison platform for buying, renting and investing across the UK, and it is free for property seekers to use.

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Start with properties for sale, explore the full listings or find a local expert in our directory of property professionals. For wider reading on the market, our Property Insights blog covers more topics. Looking for something other than a standard home? We also list land and plots, commercial space and student accommodation.

FAQ

Will UK house prices rise in 2026?

Most forecasts point to a small rise, though the range is wide. Nationwide expected growth of 2% to 4%, Capital Economics about 1.5% by the fourth quarter, and the ONS recorded 0.9% annual growth to August 2026. A small rise is the most likely outcome, but individual areas will differ.

What will the average UK house price be at the end of 2026?

The ONS put the average at £273,000 in August 2026, and that figure is provisional. With forecasters expecting only modest movement, the year-end figure should be close to it. The exact number depends on which index you use, as each measures slightly differently.

Are house prices falling in London?

Yes, according to the ONS, average London prices fell 2.2% in the 12 months to August 2026. Over the same period prices rose in England as a whole by 0.4%, in Wales by 3.1% and in Scotland by 2.9%. Check recent sold prices in your borough before drawing conclusions.

What is the UK housing market forecast for the next five years?

The OBR projects house-price inflation averaging just over 2.5% across its forecast period, with Capital Economics expecting firmer growth of 3.5% in the year to the fourth quarter of 2027. Long-range forecasts change as interest rate expectations change, so revisit them regularly.

Is it a good time to buy a house in the UK?

It depends on your finances and plans rather than the forecast alone. Slower price growth can give buyers more room to negotiate, and Nationwide expects affordability to improve gradually. Speak to a mortgage adviser about what you can borrow and plan to hold the property for several years.

Sources

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UK House Price Forecast 2026: What the Experts Expect | PropertyZoom