According to forecasts by real estate agent Jackson-Stops, home prices will rise by 2% to 3% in 2026 as the market begins to recover.
Jackson-Stops said the autumn budget moved markets away from worries about more punitive wealth and property taxes, at least for now.
The estate agent said this, coupled with the Bank of England’s expected base rate cut, could give many sellers and buyers the confidence to move forward with their plans.
Jackson-Stops noted that January marks six years since the “Boris bounce”, the Covid-19 outbreak and a prolonged period of disruption and uncertainty in the housing market.
Six weeks after the property market shut down, the scramble for space has emerged, driven by a short stamp duty holiday. The 2022 emergency budget has thrown the housing market into chaos, with historically low interest rates soaring and post-Covid inflation taking hold.
The situation then worsened as house prices in coastal and rural areas of the UK were unusually high and the increasing regulatory burden on individual landlords and second home owners led to a sell-off of second homes.
Then, political instability during the 2024 and 2025 general elections led to slow progress on the budget.
Nick Leeming, chairman of Jackson-Stops, said: “Many mortgage lenders have taken into account that interest rates are expected to stabilize at around 3%. This improvement in the outlook will help restore confidence across the market.”
“The first quarter of the year will be particularly busy, driven by pent-up demand ahead of the Budget, and is expected to continue into next year, reinforcing a spring rebound that should be more pronounced than long-term normal levels.
“While many in the industry were nervous about flying kites as the Budget approached, the end result was better than initially feared. This set the stage for an unexpected ‘Reeves bounce’, giving buyers the confidence to continue with their plans and move forward.”
