UK property in 2026: a divided market, and where the opportunity hides.

Ask five forecasters where UK house prices go in 2026 and you'll get five answers, from Savills at −2% to the OBR near +2.5%. Normally I'd tell you to ignore that noise. This time the disagreement is the story: it's telling you 2026 is not one market. It's a country splitting in two — by region, by price bracket, and by who's actually buying. I built my career in London from 2006, and I've rarely seen the gaps this wide.

So let me give you the grounded version — what the data actually says, where the risk is, and where a patient buyer quietly does very well.

The tailwind everyone assumed just stalled

The optimistic forecasts you saw late in 2025 all rested on one bet: that mortgages would keep getting cheaper. The Bank cut four times through 2025 to 3.75% by December — and then stopped. By mid-2026 the rate was on hold, with two Monetary Policy Committee members actually voting to raise it. The market curve now prices the next move as up, toward 4.2% in 2027. Economists are split down the middle on whether cuts or hikes come next, which is precisely why the forecasters who assumed cheap money have been quietly revising down — Savills went from +2% to −2% in six months.

Meanwhile, real mortgage rates sit around 4.9% for a mainstream borrower (best-buys near 4.2%), and roughly 1.8 million fixed deals expire in 2026 — many taken out in 2021–22 at 1.5–2.5%. That's a wall of households facing a payment step-up, and it's a drag on spare cash even as headline rates ease. This isn't a distressed market — arrears are low and improving — but it is a market where buyers are being careful.

It's a buyer's market. Say it plainly.

The activity data leaves no doubt. Mortgage approvals hit their lowest since 2023. Homes for sale are up on the year — London stock is up around 13% — and the average sale is now agreed at roughly 8% below asking (about £25,000), with a third of listings having taken a price cut. Zoopla's phrase for 2026 is the right one: "committed movers" are completing while discretionary buyers step back and wait.

The real divide: North rising, London falling

This is the number that reframes everything. In the year to spring 2026, the North East rose roughly 9% — while London fell around 2%, the only English region in outright decline. The reason is affordability, pure and simple. When the average northern home is near £190,000 and the average London home is near £690,000, a rise in monthly mortgage costs bites almost four times harder in the capital. Zoopla put actual numbers on it: since January, mortgage costs rose about £244 a month in London versus £69 in the North East.

That's why Savills and most others expect the North, Midlands, Wales and Scotland to outperform London over the next five years — the opposite of the story most people still carry in their heads. If you're buying for growth in 2026, the map matters more than it has in a decade.

Prime London — and where the money went

The top of the London market is having its own, harder story. Prime Central London is down around 5% year-on-year and sits roughly 22% below its 2015 peak. But the price fall isn't the headline — the volume collapse is: prime London transactions fell somewhere between 27% and 36% year-on-year, with super-prime the weakest of all.

The trigger was tax. The abolition of the non-dom regime in April 2025 pushed a wave of international wealth out — and the destinations are telling. Roughly two-thirds of £15m-plus sellers in 2025 were non-doms leaving for Dubai, Abu Dhabi, Milan, Monaco and Geneva. I watch both ends of this because I operate in both: the capital leaving prime London is, in real and measurable amounts, landing in the Gulf. It's the single clearest example I know of a policy in one country becoming a boom in another. (One caveat on the honesty ledger: the widely-quoted "16,500 millionaires left" figure is contested and probably overstated — the far better-evidenced fact is the transaction collapse itself.)

Rents cooled, and the landlord "exodus" is overstated

After the frenzy of recent years, rents have finally calmed — Zoopla has new lets up just 2.1%, the slowest in four years, as demand normalised and supply rose. You'll hear that landlords are fleeing en masse. The data says otherwise: landlord purchases fell to about 11% of the market (the lowest on record) after the 5% stamp-duty surcharge — but the rental stock actually grew in 2025. What's happening isn't a fire sale; it's fewer new landlords buying, plus a big shift into limited-company ownership. The Renters' Rights Act, which took main effect on 1 May 2026 (scrapping Section 21, making tenancies rolling, capping rises to once a year), hasn't moved rents yet — but it's the structural change every landlord and investor now has to underwrite.

The policy overhang

Three things sit on sentiment. Stamp duty got more expensive from April 2025 (the nil-rate band dropped back to £125k, first-time-buyer relief to £300k). A new "mansion tax" — a council-tax surcharge on homes over £2m, £2,500 to £7,500 a year — was confirmed in the November 2025 Budget and lands in April 2028, with valuations happening during 2026; unsurprisingly, £2m-plus listings jumped as some owners moved early. And there's a persistent hum of speculation about the autumn 2026 Budget — capital-gains and income-tax equalisation, council-tax revaluation — that keeps investors cautious. Tax uncertainty, more than any single rate, is what's freezing the top of the market.

The case for patience

Here's what a soft year hides: Britain is still not building enough homes. The government's 1.5-million-homes target is already tracking at roughly a fifth of pace, and completions actually fell in 2025–26 to their lowest since 2015. Chronic undersupply doesn't help you in a nervous 2026 — but it's the floor under prices over five years, which is why even the bearish forecasters still see cumulative growth of 18%+ to 2030, led by the North.

So what would I actually do? If you're a buyer, this is a market to be bought in, not sold in. The discounts are real, the competition is thin, and the mortgage-rate relaxation (95% LTV back to its widest since 2008, loan-to-income limits loosened) has quietly made borrowing easier for the well-prepared. Buy on affordability and yield — which points north and to the regions, not to another prime London flat competing with a wall of similar stock. And if you're a dollar- or dirham-based buyer, understand what you're looking at: prime London has been marked down twice, once by the market and once by sterling. That's not a city that's finished. That's a city on sale for the patient — a point I've made before and believe more than ever.

2026 UK property isn't a crash and it isn't a recovery. It's a reset that has stopped rewarding everyone and started rewarding the people who read the map correctly. Get the region, the bracket and the timing right, and a divided market is exactly where the quiet money gets made.

Saied Nazemi — Founder, TRPE Real Estate · Building in London since 2006