The mood has shifted.
In the past few days, many buying agents have said the same thing – the Budget has faded into the background and activity has picked up again. Viewings are back. Conversations feel more positive. Buyers are moving from pause to plan.
So what’s driving that change – and what are the big agencies predicting for 2026?
The Budget feels priced in
For many buyers, the uncertainty around the Budget has passed. The market has absorbed it.
That matters because confidence drives decisions. Once buyers stop waiting for policy shocks, they refocus on fundamentals – lifestyle, timing, schools, work, and long-term value. That shift alone has brought deals back to the table.
Several large agencies now expect steady rather than volatile conditions through 2026, especially in prime and super-prime markets where needs outweigh sentiment.
Interest rate cuts are back in the conversation
The biggest factor shaping forecasts is interest rates.
Swiss private bank Lombard Odier has predicted that the Bank of England could cut the base rate to 2.75% by the end of 2026.
That’s a bold call – and one that has caught attention across the property sector.
Their view rests on a weakening labour market, slower wage growth, and easing inflation pressure. Senior Macro Strategist Bill Papadakis has pointed to falling vacancies and softer pay growth as signs that policymakers will need to respond.
Unemployment has already moved above 5%, while private sector wage growth has slowed below 4%. Those trends matter because they reduce pressure on the Bank to keep rates high.
Other forecasts – cautious, but aligned
Lombard Odier sits at the optimistic end, but other forecasters broadly agree on direction.
- Capital Economics expects the base rate to fall to around 3%
- Deutsche Bank forecasts two further cuts, taking rates to 3.25%
- Pantheon Macroeconomics urges caution, citing inflation risks linked to Budget measures
The difference lies in pace, not outcome. All expect lower rates than today.
What lower rates mean for buyers in 2026
A base rate closer to 3% – or below – changes behaviour.
- Monthly costs fall, even for high-value borrowing
- Lenders compete harder, improving product choice
- Buyers regain confidence in future affordability
- Sellers adjust expectations, helping deals complete
For prime and discretionary buyers, confidence often matters more than cost. Clear direction from the Bank gives that reassurance.
This is one reason buying agents are seeing renewed momentum now – buyers are acting ahead of expected cuts rather than waiting for perfect conditions.
Why predictions matter – but timing matters more
Forecasts shape sentiment, not outcomes. The best buying decisions still come from timing, access, and advice.
In tighter or quieter markets, off-market opportunities increase. In recovering markets, competition returns quickly. Knowing when to move – and where leverage sits – makes the difference.
That’s where a buying agent adds value, especially when conditions change faster than headlines suggest.
FAQs
Is the UK housing market expected to improve in 2026?
Most major agencies expect steadier conditions and improved confidence, supported by falling interest rates and reduced uncertainty.
Will interest rates fall in 2026?
Several forecasters expect further cuts. Estimates range from around 3% down to 2.75% by the end of 2026.
Does a lower base rate mean house prices will rise?
Lower rates tend to support demand, but price growth will vary by location, stock quality, and buyer type.
Is 2026 a good time to buy property?
That depends on your goals. Many buyers are acting earlier, ahead of rate cuts, to secure better choice and negotiating power.
Do buying agents matter more in a changing market?
Yes. Shifting conditions increase the value of access, local insight, and skilled negotiation.