Our view that mortgage rates will continue to drift lower, from 4.0% in December 2025 to around 3.9% this year, together with continued tight supply of new homes and the prospect of more mortgage lending, should allow house prices to rise in the year to Q4 by 3.5% in 2026 and by 3.0% in 2027. But the tax rise on expensive homes announced in the Budget will probably keep the top end of the market relatively subdued. (Clients can explore and download all our UK housing forecasts in our UK Housing Data Dashboard.)