House Prices Predicted to Increase by 2% in 2026 

Across the property industry there is a consensus that average house prices will gradually increase in 2026, with a majority of leading experts predicting a rise of around 2%. 

Rightmove shared their forecast of a 2% increase in average house prices, while Zoopla revealed their more cautious prediction of a 1.5% rise. 

Nationwide gave a broader range with a forecast of 2-4%, reflecting that it has become increasingly difficult to make accurate predictions in the current economic climate. 

Factors Influencing House Prices in 2026 

In December, the Bank of England base rate reduced from 4% to 3.75%, which was the sixth cut since August 2024. This latest cut brings interest rates to the lowest level in almost three years. 

The Bank of England governor Andrew Bailey said that rates are “likely to continue on a gradual downward path” and there is optimism that the inflation target of 2% could be met by spring or summer 2026. 

Rising unemployment rates and weak economic growth will be major considerations when the Bank of England’s Monetary Policy Committee meet to vote on the next base rate decision. The December 2025 vote was a very close call, with a 5-4 vote in favour of a cut, which suggests a further decrease is unlikely at the next vote in February. 

Are London House Prices Going to Increase? 

Following some volatile years for the London property market, many experts are expecting stabilisation in 2026. The most expensive London boroughs experienced a price slump towards the end of 2025 but areas such as Havering saw strong house price growth. 

Rightmove has predicted that the average asking price in the capital will increase by 1% in 2026, half the rate they expect for the wider UK.  

Properties valued at over £2 million are set to incur the “Mansion Tax” council tax surcharge from 2028, which is likely to be passed onto house values. Meanwhile, steady house price growth is anticipated in more affordable London areas.