Estate agents are anticipating a challenging end to 2026 for the housing market, with warnings that a potential interest rate rise this week could further reduce buyer demand. This follows Nationwide's figures showing annual house price growth at 0.5% in October, the lowest since January 2024.
Industry commentators suggest that increasing mortgage costs are already altering buyer behaviour, with some purchasers opting to borrow less and others postponing their decisions. Amy Reynolds, head of sales at Antony Roberts, noted that the rapid increase in mortgage rates since spring has surprised the market.
Jason Tebb, president of OnTheMarket, stated that the Bank of England's decision to maintain interest rates throughout 2026 had supported affordability. However, he cautioned that rising inflation might compel policymakers to increase rates at the upcoming meeting. Jonathan Hopper, CEO of Garrington Property Finders, also expects borrowing costs to remain under pressure.
Tom Bill, head of UK residential research at Knight Frank, indicated that the Middle East conflict is increasingly impacting the housing market, with mortgage approvals down by almost a fifth compared to last year. He added that rising mortgage costs are overshadowing any housing support measures announced in the Budget.
Nicky Stevenson, managing director of Fine & Country, observed that while buyers remain active, they are becoming more cautious and selective. This suggests that vendors may need to adjust their expectations to secure sales before Christmas, given ongoing concerns about borrowing costs.