The UK housing market is showing early signs of a pivot as 2026 gathers pace, with a mix of data pointing to both resilience and caution among buyers and sellers. A recent survey by the Royal Institution of Chartered Surveyors (RICS) found improving sentiment among estate agents, with buyer enquiries and agreed sales emerging from 2025’s long subdued conditions.

RICS reported a less negative net balance for pricing expectations than seen in recent surveys, with 43% of respondents forecasting price rises over the next year—the most positive outlook since early 2025. While overall activity remains subdued, the shift suggests sentiment may be stabilising from last year’s prolonged uncertainty.

Market watchers attribute part of this cautious optimism to early signs of price stability following post-autumn Budget volatility and inflation easing. UK inflation recently hit a 10-month low, prompting speculation that further Bank of England rate cuts could be on the horizon, a factor that typically supports borrowing confidence.

At the same time, London’s property market continues to underperform relative to the rest of the UK. The capital has seen price declines and slower rent growth, while more affordable regions have maintained modest upward momentum. This divergence has become a structural feature of recent market behaviour, as affordability pressures and post-pandemic lifestyle preferences influence buyer choices.

Despite these mixed signals, longer-term forecasts remain cautiously constructive. Leading lenders such as Nationwide anticipate 2–4% price growth in 2026, supported by gradual improvements in affordability and steady yet moderated mortgage costs compared with recent peaks.

For investors, this moment is less about dramatic repricing and more about a recalibration of expectations. The market, having weathered elevated rates and policy uncertainty, appears to be entering a phase where incremental gains and stabilisation matter more than headline booms. Regional diversity, price points and asset classes will drive different outcomes, but the overall theme is one of resilience rather than contraction.

As macroeconomic conditions evolve—including inflation trends and potential rate adjustments—the housing market’s near-term path is likely to remain cautious. However, for patient capital with a long-term horizon, the emerging data suggest conditions that are increasingly predictable, even if not uniformly buoyant.

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