After an unexpected fall of 0.6% in house prices in 2025, Rightmove is forecasting modest headline growth of around 2% in 2026.
However, the portal says that headline figure masks some wide variation, as the country is made up of a huge number of hyper-local markets which will all perform very differently.
Overall, it expects improved buyer affordability and a growing choice of homes for sale to support activity, but the extent of that support will vary widely depending on the balance between house prices, earnings and borrowing capacity.
Clear North/South dividing line
It is why Rightmove is predicting there will be a clear dividing line between the south of England and the rest of Great Britain. In London and much of the south, the ratio of house prices to wages is far more stretched, limiting the potential pool of buyers who are able to proceed with purchases, despite the easing of mortgage rates. Rightmove says this is likely to result in slower activity, greater price sensitivity and longer selling times.
At the top end of the southern market, policy changes have added some further pressure. Although many rumoured taxes failed to materialise in November’s Budget, a new Mansion Tax for homes valued at £2 million or more was confirmed. The annual charge, due to take effect from April 2028, will start at £2,500 and rise to £7,500 for homes valued at £5 million or over.
Tax and the top end of the market
Rightmove notes that while this affects only a very small proportion of the market — around 1% of homes are currently priced above £2 million — the recurring nature of the tax has longer-term implications for both existing owners and potential buyers. It says this could lead to some sluggishness and volatility at the very top end, with some sellers choosing to reduce prices either to fall below the various tax thresholds or to offset the additional costs that buyers are facing.
In contrast, Rightmove expects Wales, Scotland and northern England to perform more strongly in 2026. In these lower-priced areas, house prices are more closely aligned with local earnings, meaning improved affordability and borrowing capacity will feed through to market activity. The portal says, however, that this will support steady transaction levels rather than rapid price growth.
Marked increase in first-time buyer activity
It’s typical first-time buyers that are expected to be amongst the biggest winners from the 2026 market, though. Average wage growth is likely to continue outpacing house price growth, improving affordability, while the increasing number of homes available for sale will keep a lid on prices.
In addition, changes to loan-to-income limits and stress rate testing are expected to allow some first-time buyers to borrow more. Combined with slowing annual rent rises, this could help some renters raise the deposit required to take a first step onto the housing ladder, especially in the more affordable areas.
New trends to emerge
Colleen Babcock, Rightmove’s property expert, says:
“2026 will be a mix of some key property market themes continuing, and other new trends emerging. We expect many of those who put their moving plans on hold over the last few months will pick them back up again from Boxing Day and into the new year, now the Budget is out the way.
“We predict the market will look and feel very different depending on which area of Great Britain you’re in, and the type of property you’re looking to sell or buy, with big differences particularly between the south of England and the rest of Great Britain.
“The market conditions next year will favour typical first-time buyers over those at the top-end of the market.”
