Our forecast that Bank Rate will be cut from 4.75% now to 3.50% in early 2026, which would be further than the low of 4.00% that investors currently expect, explains why we think the average mortgage rate will fall to around 4.0% in 2026. As a result of the improvement in mortgage affordability, we expect mortgage approvals for house purchase and transactions to rise by around 6.0-7.0% in 2025. That will drive above-consensus house price growth of 3.5% in Q4 2025 and 4.5% in Q4 2026.