With a smaller boost from mortgage rates on the cards, we now expect house prices in the year to Q4 to rise by 3.5% in 2026 (5.0% previously) and by 3.0% in 2027 (3.5% previously). While we don’t think tax rises in the Budget will have a big influence on the average house price, the tax hikes on expensive homes will be a modest drag on activity and prices at the top end of the market.