As 2025 comes to an end, the UK housing market is showing signs of cautious stability. Whether you're buying your first home or planning a move, understanding the current landscape can help you make confident decisions.
Understanding the current market
The market has settled after a few unpredictable years. Recent data shows average UK house prices have seen modest growth, with England’s average nearing £292,000. While buyer interest remains steady, activity has slowed slightly due to speculation around upcoming tax changes, including potential reforms to Stamp Duty and Capital Gains Tax.
Mortgage rates and affordability
Mortgage rates have eased from their 2023 highs. The average five-year fixed rate now sits around 4.9%, with some lenders offering deals closer to 4%. This shift has helped improve affordability, especially for first-time buyers using schemes like Shared Ownership and First Homes. However, affordability remains stretched in high-demand areas, and early mortgage advice is recommended.
Buyer and seller behaviour
Buyers are increasingly focused on value, energy efficiency, and location. Sellers are responding with realistic pricing and improved presentation. Many are keen to complete sales before any potential tax changes take effect.
Regional trends
Regional differences are becoming more pronounced. Northern regions such as the North East and Yorkshire & Humber are seeing the strongest growth, with rent inflation reaching over 9.4% in some areas. Wales also shows steady price increases, offering attractive alternatives to London, where growth remains flat. These areas present opportunities for buyers seeking affordability and lifestyle.
Looking ahead to 2026
Forecasts suggest national house price growth of 2–4% in 2026, with stronger performance expected in the North of England. If inflation continues to ease, mortgage rates may follow, improving affordability and boosting buyer confidence. Sellers will need to remain competitive as the market continues to rebalance.
Thinking of making a move?
Reeds Rains is here to help. Whether you're buying, selling, or just exploring your options, our local experts can guide you every step of the way.
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