Property consultancy Hamptons has issued its forecast for 2026 and two years beyond.
It says inflation is likely to fall faster than anticipated over the next year, allowing for two or three base rate cuts. “We expect the Bank Rate to settle at around 3.25% by the end of 2026, with typical mortgage rates stabilising at around 4.0%.
“This should improve the availability of sub-4% mortgage deals, even for borrowers with smaller deposits, helping to support price growth and activity” says the agency’s forecast.
And it anticipates what it calls “modest growth” in house prices across Britain.
Based on the government’s official House Price Index, it says prices are forecast to rise by 2.5% over the coming year, with stronger growth in the Midlands and North where affordability is less stretched.
Transaction volumes are likely to hold at around 1.15m, predominantly supported by necessity-driven moves – such as growing families and relocations – but still remain slightly below historic norms.
But there are hiccups.
The agency says that at this stage in the cycle, it would typically expect the London market to regain momentum.
Historically, the capital leads recoveries once affordability improves, but this time the rebound looks muted.
It forecasts a stagnant market on average across Greater London in 2026 as the market digests recent tax changes
While small price falls are expected in the £1.9m+ segment, this is likely to be offset by growth in the mainstream market, where improving affordability and easing mortgage rates are starting to support buyer confidence.
The agency comments: “One growing challenge is the lack of price growth for higher-value homes. Declining prices – particularly in Prime Central London – mean a rising share of households are selling for less than they paid.
“In 2025, 14% of London sellers sold at a loss, up from 6% in 2016. This disincentivises moves and encourages owners to stay put, especially when faced with the high cost of Stamp Duty Land Tax on their next purchase.
“As a result, the London market is increasingly being driven by first-time buyers, who accounted for 50% of homes sold in the capital [in 2025].”
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Annual House Price Growth Forecast (f = forecast)
| Q4 2024 | Q4 2025 (f) | Q4 2026 (f) | Q4 2027 (f) | Q4 2028 (f) | 4year total (2024-28) | |
| London | 1.5% | -0.5% | 0.0% | 1.0% | 0.0% | 0.5% |
| East of England | 1.2% | 2.0% | 0.5% | 1.0% | 0.5% | 4.1% |
| South East | 1.6% | 1.0% | 0.5% | 1.0% | 0.5% | 3.0% |
| South West | 1.0% | 1.5% | 1.5% | 1.0% | 1.0% | 5.1% |
| East Midlands | 2.3% | 3.0% | 3.0% | 2.0% | 2.0% | 10.4% |
| West Midlands | 2.9% | 3.0% | 3.5% | 2.5% | 2.5% | 12.0% |
| North East | 3.9% | 3.5% | 4.5% | 4.0% | 3.5% | 16.4% |
| North West | 3.9% | 3.5% | 3.0% | 2.5% | 1.5% | 10.9% |
| Yorkshire & Humber | 3.8% | 3.0% | 4.0% | 2.5% | 2.5% | 12.5% |
| Wales | 2.1% | 2.0% | 3.5% | 2.5% | 2.0% | 10.4% |
| Scotland | 3.1% | 5.0% | 3.0% | 3.0% | 2.0% | 13.6% |
| Great Britain | 2.4% | 2.0% | 2.5% | 2.0% | 1.5% | 8.2% |
