Story perspectives

UK House Prices Set to Rise 1.5% by 2026

12/28/2025

Summary

Story summary

Average UK house prices are expected to rise 1.5% in 2026, with a regional divide favoring southern England.
Mortgage markets remain competitive, keeping borrowing costs around 4%.
The Bank of England has cut its rate to 3.75%, benefiting borrowers with variable-rate mortgages and remortgaging.
Experts say those exiting fixed-rate mortgages in 2026 will find lower rates available.
Anticipation of further rate cuts in 2026 may prompt borrowers to act quickly.

History

Historical Context

In 1997, the Bank of England gained independence to set interest rates, leading to a period of price stability until the 2008 financial crisis. In response, the Bank cut rates to 0.5% in March 2009 and initiated quantitative easing, injecting £375 billion into the economy. As rates decrease to 3.75% today, similar trends in mortgage approvals may signal a housing market recovery in southern England.

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Story summary

Average UK house prices are expected to rise 1.5% in 2026, with a regional divide favoring southern England.
Mortgage markets remain competitive, keeping borrowing costs around 4%.
The Bank of England has cut its rate to 3.75%, benefiting borrowers with variable-rate mortgages and remortgaging.
Experts say those exiting fixed-rate mortgages in 2026 will find lower rates available.
Anticipation of further rate cuts in 2026 may prompt borrowers to act quickly.

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