In 2026, first-time buyers can benefit from cheaper mortgages, rising wages, and looser lending criteria. House prices are expected to show modest growth following a dip at the end of 2025 due to increased property taxes on high-end houses.

Experts forecast UK house prices to rise between 1% and 4% in 2026. Halifax predicts a 1% to 3% increase, while Nationwide expects 2% to 4% growth. Rightmove reports a 2.8% jump in January asking prices, the largest for that month on record.

The Bank of England’s interest rate cuts in 2025 have led to cheaper mortgages, benefiting those on standard variable rates. Futures markets predict another rate cut this year. Average mortgage rates slightly increased in January 2026 but may offer cheaper “best buy” deals for first-time buyers.

Now may be a good time for first-time buyers to enter the market due to falling interest and mortgage rates. Buy-to-let landlords are exiting the market, creating opportunities for buyers. Continued improvements in mortgage rates could boost affordability levels for buyers.

Data on UK house prices in 2025 is mixed, with different indices showing varied results. Rightmove’s January update shows a 2.8% increase in prices, while Halifax and Nationwide data for December were more mixed. The impact of budget changes in late 2025 influenced price fluctuations.

Read more at Morningstar: What’s the Outlook for UK House Prices in 2026?