UK house prices will see modest growth, rising 2.5% in Q4 2026 as inflation cools and interest rates ease , according to the latest Hamptons Housing Market Forecast.
Transaction volumes are predicted to remain steady at 1.15 million in 2026, with affordability improvements offsetting economic and tax headwinds.
Political risk and higher borrowing costs will weigh on price growth from 2027, with growth slowing to 2% in Q4 2027 and 1.5% in Q4 2028.
Hamptons expects prime markets to remain subdued, with tax policy and uncertainty curbing mobility and recovery.
The report also points out that since house prices bottomed out in 2009, the East Midlands will have seen more price growth than London by next year, with the North West and West Midlands following by the end of 2027, marking a major change in the regional house price cycle.
Commenting on the latest projections Hamptons head of research Aneisha Beveridge said:”The housing market has always mirrored the mood of the nation. While the headlines have been dominated by uncertainty, underneath it all, we’ve seen signs of resilience. Inflation is easing, mortgage rates are falling, and affordability is improving, which should support modest price growth next year.”
But she said it was hard to ignore the growing drag of taxation and politics. “London, which historically leads recoveries, is being held back by higher stamp duty and broader tax anxieties, locking some owners into their homes and others out of buying them. The next phase of the cycle will be shaped less by discretionary moves and more by pragmatism – with policy playing an increasingly central role in determining who moves, when, and where. At the same time, the balance of power is shifting: the Midlands is forecast to have seen more price growth than London since prices bottomed out after the 2008 financial crash.”
Beveridge added that following the Autumn Budget, Hamptons updated its housing market outlook to reflect the latest economic and policy changes.
“While the Budget brought clarity for the mainstream market, demand-side stimulus such as Help to Buy or a stamp duty cut was absent, meaning markets will remain cautious. The Budget introduced targeted measures, including a council tax surcharge on £2m+ homes and higher property income tax for landlords, affecting only a small slice of the market.”
