Dear Client,
Following the Chancellor’s Spring Statement and the latest forecasts from the Office for Budget Responsibility (OBR), we wanted to provide a clear update on what this could mean for the housing market and your property decisions in 2026 and beyond.
- Interest Rates & Inflation
Inflation is forecast to return to the Bank of England’s 2% target over the coming years. If this materialises, interest rates are expected to remain broadly stable, with mortgage rates projected to average around 4.5% from 2027 onwards.
While global events may still influence short-term movements, the overall outlook points toward a more predictable lending environment. Stability in borrowing costs is often positive for buyer confidence and transaction levels.
- House Price Forecasts
The OBR forecasts house price growth of approximately 2.4%–2.9% per year between 2026 and 2030 — broadly in line with wage growth.
This suggests:
- No signs of a market correction or crash
- No return to the rapid price inflation seen in 2021–2022
- A steady, sustainable growth pattern
For sellers, correct pricing will remain key. For buyers, the market should offer more balanced conditions and negotiation opportunities.
- Buyer Demand & First-Time Buyers
Mortgage lenders are currently competing strongly for first-time buyers, with higher income multiples and lower deposit products becoming more widely available.
This is helping to:
- Support demand at entry and mid-level price points
- Maintain transaction activity
- Ease some pressure on the rental market
- The Rental Market
Although rental growth has slowed compared to the sharp increases seen since 2020, demand continues to outstrip supply in many areas. With borrowing costs still relatively elevated and taxation remaining a factor for landlords, rental values are unlikely to fall significantly in the near term.
Overall Outlook
The message from the Spring Statement is one of stability rather than volatility. The housing market appears set for modest, sustainable growth rather than sharp rises or falls.
As always, local market conditions can vary significantly from national forecasts. If you would like tailored advice regarding selling, purchasing, letting, or portfolio strategy, please do not hesitate to contact our team.