A conveyancing expert at Bird & Co, whose housing market forecasts for 2025 were strikingly accurate, believes that 2026 will bring a steadier property landscape. While pressure in the rental sector is set to continue, easing mortgage rates and improving affordability could offer more encouraging signs for buyers…
Daniel Chard, Partner at conveyancing specialist Bird & Co, has shared his housing market predictions for 2026, following a year in which many of the firm’s expectations for interest rates, house prices and market activity were largely borne out.
As 2025 comes to a close, the market appears more evenly balanced than it has been for some time, with modest price growth, easing borrowing costs and a stronger position for first-time buyers.
According to Bird & Co, the main trends expected to shape the housing market in 2026 include:
- Interest and mortgage rates continuing to ease
- House prices rising at a moderate pace
- Housing demand increasing
- Ongoing pressure within the rental market
- Faster delivery of sustainable new-build homes
- Greater use of AI across the property sector
Following the Bank of England’s base rate cut to 4% in August 2025, mortgage pricing has gradually improved across the market.
Daniel says, “Current forecasts suggest that interest rates may edge down further during 2026, though not return to the very low levels seen in previous decades.
“If inflation continues to move closer to target and the wider economy remains stable, buyers may benefit from a broader range of competitively priced mortgage products.”
Daniel also expects house prices to continue rising modestly in 2026, following low single-digit growth in 2025. Rather than large regional swings, price performance is likely to be increasingly influenced by micro-location factors.
Daniel explains, “Where buyers once compared towns or regions, they’re now comparing postcodes and even individual streets. The difference in demand between two areas half a mile apart can be astonishing.”
Housing demand is also forecast to grow during 2026. Studies suggest that affordability for first-time buyers improved in 2025, creating the most favourable conditions seen in a decade. This renewed confidence is expected to carry over into the year ahead, particularly in areas that offer good value alongside strong connectivity and a high quality of life.
Alongside rising demand, Daniel expects sustainable new builds to become even more attractive in 2026. Government guidance linked to the Future Homes Standard is encouraging higher energy efficiency requirements, while national reporting on low-energy housing schemes highlights the growing use of low-carbon heating, on-site solar generation, and battery storage.
AI is also set to play a more prominent role across the property sector. Adoption has accelerated over the past year, with technology now being used to analyse market data and forecast price trends.
Daniel notes, “AI valuations will bring consistency, but they’ll also create friction where sellers feel their home is worth more than the algorithm suggests. By 2026, this could be one of the biggest industry debates.”
By contrast, the rental market is expected to remain under strain. Rents have continued to rise more quickly than house prices in many parts of the UK, reflecting an ongoing imbalance between supply and demand. As mortgage costs ease, this may encourage some long-term renters to consider buying as an alternative.
Daniel says, “When the market is changing, understanding the detail matters. By sharing these forecasts, we want to help buyers and sellers understand what’s likely to happen next and make informed decisions about when and how to move.”
