The UK property market is expected to benefit from falling interest rates next year, with house prices forecast to rise by up to 4%. Improved affordability is likely to support buyer confidence.
Economic forecasts suggest that modest income growth and easing inflation will help households cope with mortgage repayments more effectively.
At present, the average house price is just under £273,000. A moderate rise would add around £11,000 to that figure, according to projections.
Mortgage lenders have already reduced stress-testing thresholds, allowing some buyers to borrow more than before without increasing risk.
These changes, combined with regulatory efforts to modernize mortgage advice and products, could make homeownership more accessible in 2026.