Rightmove: Following a post-budget market recovery, asking prices are expected to increase by 2% in 2026

According to Rightmove, buyers and sellers who waited for the Budget will return to the market and help drive up asking prices the following year

According to Rightmove's most recent House Price Index (HPI), the housing market is expected to improve in 2026 after a slower second half of 2025.

Due to a decline in interest rates, a large number of available properties, and a post-budget market recovery, asking prices for real estate could increase by 2% next year.

Due to the fact that many people who put their plans on hold in anticipation of the Budget are now back on the market, the real estate portal is forecasting a higher-than-normal Boxing Day bounce on its platform.

According to a recent Rightmove survey of 10,000 prospective movers, almost one in five were holding off on making any decisions until after the annual fiscal event.

According to separate data from the website, London's premium housing market is already exhibiting encouraging signs following the Budget. The number of new sellers entering the upper end of the market increased by 24% in the week following the Budget compared to the previous week.

Rightmove predicted a spike in asking prices throughout 2026 due to the decade-high number of homes for sale on its platform and declining mortgage rates.

Colleen Babcock, a property specialist at Rightmove, stated: "Rumors of changes to property taxes in November's budget, some dating back to August, created uncertainty in the second half of 2025.

Pricing and activity were affected as vendors attempted to reassure apprehensive purchasers. The customary increase in home-moving activity that occurs on Boxing Day will soon help the market. The "

In December, asking prices decline.

According to Rightmove, asking prices decreased from 364,833 to 358,138 between November and December, a decrease of 1.8%. This comes after a similar percentage decline in prices from 371,422 to 364,833 in October and November.

Due in part to the busy Christmas season, prices typically decline in December. However, according to Rightmove, this year's percentage decline was greater than the 10-year average of 1.4 percent.

In England, Wales, and Scotland, average asking prices at the end of 2025 are 0.6 percent less than those in December 2024 (-2,059).

While prices increased by 2.6 percent in the North West of England and 1.3 percent in the West Midlands, some regions saw annual growth. Over the course of the year, prices rose by 0.8 percent in the East Midlands and 0.7 percent in Yorkshire and the Humber.

Between 2024 and 2025, prices in the south of England decreased significantly, with drops of 2.7 percent in the South East and South West. London's asking price growth stagnated.

Is a reduction in mortgage costs imminent?

Since 2022, mortgage holders have been gritting their teeth as interest rates began to rise due to skyrocketing inflation, which was partly brought on by increased energy and fuel prices as well as robust global demand for goods.

According to Moneyfacts, the average rate for a two-year fixed residential mortgage increased from 2 point 52 percent in July 2021 to 6 point 86 percent in July 2023. Since then, rates have decreased; as of December 12, the average rate on a two-year fix was 4.84%.

In 2026, there will probably be a decrease in the Bank of England base rate.

The Bank of England Monetary Policy Committee (MPC) predicted in its November Monetary Policy Report that inflation would decrease to 3.2 percent by March 2026. It was 3.6% in October.

By the end of 2026, the MPC predicts that the base rate will drop from its current level of 4 percent to 3.5 percent.

When the MPC meets again on December 18, the market is generally anticipating that the base rate will be cut by 25 basis points to 3.75 percent.

"Looking ahead to 2026, the direction of travel for mortgage costs is likely to be lower, but the pace of improvement should be viewed as gradual rather than dramatic," stated Nick Mendes, the mortgage technical manager at broker John Charcol.

Nevertheless, mortgage rates will not decrease in a straight line and will continue to be influenced by wage growth, inflation data, and market confidence in the sustainability of rate cuts. The "