According to Nationwide building society, prices could be set to increase by 2-4% next year.
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UK house prices could be set to ‘rise by up to 4% in 2026’ as interest rates look set to fall according to experts.
Robert Gardner, the chief economist at Nationwide building society, said prices were likely to increase by 2-4% next year.
“We expect housing market activity to strengthen a little further, as affordability improves gradually via income growth outpacing house price growth and a further modest decline in interest rates,” he said.
Rising wages have allowed more first-time buyers to take out larger mortgages than ever before, with the average first-time buyer now borrowing a record £210,800 in the year to September, according to property agent Savills.
It comes as first-time buyers, self-employed people and older borrowers could find it easier to access mortgage finance under new plans put forward by the City regulator.
Read more: First-time buyers and self-employed could find it easier to access mortgages
Read more: Average house price is £6,695 lower than in November, says Rightmove
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An attempt to modernise rules to reflect the changing approach to house buying and living, the revamp
It comes as UK Finance said it expects around 1.2 million house sales in 2026 and 2027, down from 1.21 million this year.
The Financial Conduct Authority (FCA) said it wants to enable “the mortgage market of the future”, with a market that adapts to fast-changing technology, employment and demographic shifts, and people’s need and expectations, throughout their lives and into their later years.
The FCA will start to consult on proposed rule changes from early 2026 and aims to have the first rule changes in place later that year.
It is focusing on four areas: first-time buyers and underserved customers; later life lending; innovation and disclosure; and protecting vulnerable customers.
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It will also launch a market study to consider how the later life lending market could develop to meet different needs, with terms of reference being published in the first quarter of next year.
Looking ahead, more mortgage holders are set to borrow beyond state pension age and with projections of under‑saving into retirement, access to later life mortgages could be key to helping people achieve their financial goals, the regulator said.
As part of its work, the FCA will look at simplifying mortgage rules to allow more flexible products that reflect different working patterns and income levels at different stages of life.
It will also explore ways to improve advice to help people plan for later life and ensure the lifetime mortgage market can meet changing needs.