UK Property Market in 2026
The market sentiment for house prices remains overwhelmingly positive over the long term, despite a cooling of growth rates in the near term due to lingering higher interest rates. This moderated growth in 2026 is setting the stage for a stronger rebound later in the decade.
The period spanning late 2024 and 2025 saw the average English property value reach £295,000 (August 2025), a reflection of the market’s stability. Leading analysts remain optimistic about the medium-term outlook: Savills forecasts that UK house prices will rise by around 24.5% over the four years between 2025 and 2029, taking the average property price to an estimated £336,000 by the end of that period. For the year 2026 specifically, Savills predicts a 2.0% increase, while JLL projects a slightly stronger rise of 3.5%. Overall, JLL forecasts a cumulative growth of 19.9% over the same five-year period (2025-2029).
This current phase of slower growth is anticipated to be temporary. The long-term positive outlook is underpinned by easing mortgage affordability and an expected strengthening of the wider UK economy.
Featured Development
Beck Pavilion
Yorkshire
Introducing the second launch at The Halcyon. 54 Premium apartments overlooking the scenic Morton Beck.
- 1 & 2 Bed apartments available
- Leeds property prices set to increase by 14.6% by 2028 (JLL)
- Just 24 minutes from Leeds and 18 minutes from Bradford
- Leeds properties achieving average yields of 5.96%
- Parking available
- 20% Deposit required
- Estimated completion Q4 2026
Prices From
£163,950
UK Rental Market in 2025
The rental market continues to be a driving force in the UK property sector, maintaining significant momentum from the last few years. The fundamental imbalance between supply and demand remains acute, supporting strong rental income for investors.
Analyst forecasts reflect this strength: Savills anticipates that UK rents will grow by 12% over the four years to 2029. For 2026, Savills projects a 2.0% rise in rental prices. JLL expects marginally stronger growth, forecasting a 2.5% increase in 2026, contributing to their overall prediction of 17.1% cumulative growth over the 2025-2029 period.
The high-demand environment contributes to robust yields. With the UK average rental yield standing at 5.8%, the sector offers attractive income potential. However, tenants are facing significant pressure. The average gross median weekly pay is £728, highlighting the tight squeeze on household budgets and reinforcing the long-term nature of demand from those unable to enter the sales market.
UK Supply & Demand
The fundamental story of the UK property market remains one of chronic undersupply, particularly in the Private Rented Sector (PRS). Tenant demand continues to rise, while the number of available rental properties remains constrained, with the CPS stating that a staggering 6.5 million homes in the UK are needed to counteract this undersupply.
The Government’s commitment to delivering 1.5 million new homes over the current parliament is a long-term strategy. However, the current focus of the new Social and Affordable Homes Programme (SAHP) on Social Rent and affordable homes means that the supply of new properties specifically for the private rental market may not increase substantially in the immediate future. This structural undersupply will likely perpetuate the current demand-supply imbalance for the foreseeable future, favouring residential landlords.
Furthermore, the full implementation of the Renters (Reform) Bill in 2026 is a key consideration. While providing more security for tenants, it is also expected to prompt further consolidation in the Buy-to-Let sector, with some smaller landlords potentially exiting the market. This could temporarily tighten supply, maintaining upward pressure on rents.
Want to know more about the UK property market for 2026? Download the UK Investment Guide today and discover everything you need to know about UK property investment in the new year. In this guide you’ll find:
- Current market performance
- Forecasts for the UK property market in 2026
- Key trends impacting the market
- Best places to invest in 2026
UK Economic Performance in 2026
The economic backdrop for 2026 is one of expected stability and recovery. Following a period of economic adjustment, inflation is projected to be under control, allowing the Bank of England to continue on a path of gradual base rate reductions, which will ultimately benefit the property sector by improving mortgage affordability and restoring confidence. A strengthening economy, characterised by rising GDP growth and stable employment, is the catalyst for the anticipated stronger capital growth in the latter half of the forecast period, underpinning the strong long-term growth figures from Savills and JLL.
This improvement to UK economic performance spells good news for property investors, suggesting that capital growth across the property market will be strong in the coming years as confidence and demand for UK property continues to strengthen.
Featured Development
No. 30 St Pauls
Birmingham
Introducing No. 30 St Pauls, 58 luxury apartments in Birmingham’s sought-after Jewellery Quarter.
- 1, 2, and 3 bedroom luxury apartments
- Rental values to increase by 18.8% over the next 5 years (JLL)
- Property values to increase by 24% over the next 5 years (JLL)
- 20 % Deposit required
- Estimated completion Q1 2026
- Prime location directly on St Paul’s Square
Prices From
£249,950
Strong City Centre Performance
The trend towards urban repopulation and the focus on regional powerhouses is a key investment theme for 2026. Hybrid working models have stabilised, bringing professionals back into city centres, driving up demand for conveniently located, high-quality rental accommodation.
The most competitive markets for both rental and capital growth are anticipated to be in cities with strong regeneration pipelines and high-quality universities.
The long-term outlook for the UK highlights a sustained period of growth, with our analysis suggesting that house prices are projected to increase between 3.0% and 4.5% in the year to May 2026. This upward trajectory is expected to continue strongly through the rest of the decade, with annual growth peaking between May 2026 and May 2028 (4.0% to 5.5% and 4.0% to 5.0%, respectively), before moderating slightly into the later years.
This national outlook is significantly outperformed by key regional cities. Birmingham, for example, is forecast by the Joseph Mews team to lead the charge, with property prices expected to rise between 5% and 7% in the year to May 2026. While the growth rate is expected to stabilise in the following years (ranging from 4% to 6% and then 4% to 5% in the subsequent two periods), this accelerated near-term growth solidifies Birmingham’s position as a top-tier location for investors seeking above-average capital appreciation.
This data underscores the shift in market performance, with more affordable regional centres like Birmingham offering the highest potential for outperformance compared to the broader UK average.
Frequently Asked Questions
Is buy-to-let a good investment?
If you were to measure how ‘good’ a buy-to-let investment is based on its past performance, this asset would probably come out on top. However, different assets will suit some more than others based on their financial goals.
If you’re looking for a resilient asset that can offer a passive income as well as the opportunity for capital growth, buy-to-let property could be the best asset for you.
With JLL suggesting that UK property values could see a cumulative boost of 17.6%, and a rental price boost of 18.8% until 2028, forecasts suggest that buy-to-let property could be the route to financial freedom for many investors.
Is buy-to-let worth it?
When it comes to investing there’s generally no ‘one size fits all’ approach and buy-to-let property will suit some investors more than others.
However, for those who are looking for a long-term investment asset with a track record of competitive growth and more price increases on the horizon, buy-to-let is often the best option.
Buy-to-let is a flexible investment assets and can offer diversification across a wider portfolio. It’s historically one of the most stable assets and is much less exposed to external factors, plus it’s a physical asset, which makes it appealing with certain investors.
The answer to ‘is it worth it?’ depends entirely on how you use it. If you use it as a long-term asset, it’s proven to be a potentially lucrative investment vehicle that can be scaled effectively.
Why invest in UK property?
UK property is recognised as one of the most appealing investment assets across the world. In comparison to other markets, the UK property market is not only resilient, but it can offer consistent short- and long-term returns.
While rental income can usually cover the monthly payments of the property and then some, this asset also grows over time. UK property prices have been on a consistent upward trajectory and have recovered well from the unease of 2021’s pandemic property market which saw some sharp peaks and troughs: a testament to the long-term resilience of this asset class. What’s more, the average property is worth 48% more now than it was a decade ago according to the Land Registry UK House Price Index, demonstrating the potential for capital growth.
The answer to ‘is it worth it?’ depends entirely on how you use it. If you use it as a long-term asset, it’s proven to be a potentially lucrative investment vehicle that can be scaled effectively.
Will prices fall in the UK?
There is no strong evidence that UK property values will fall in the next few years. Predictions from the likes of Savills and JLL agree that the property market is on a strong path of continued growth, with each year until 2028 forecast to experience at least 2% property price growth and 3% rental price growth according to JLL.
Where to invest in buy-to-let in the UK?
Understanding where to invest in buy-to-let in the UK continues to be a tough decision for many investors, especially with so many potential locations in the country.
The best way to answer this question is to establish what you’re looking to achieve. Do you have short or long-term goals? Are you looking for capital growth or rental yields?
If you’re looking for more immediate rental returns, you’ll need a location with high yields and strong tenant demand. Look to established cities such as Birmingham and Manchester which have undeniably strong tenant demand, great job opportunities and an abundance of inner-city amenities.
On the other hand, if you’re investing for capital growth, you’ll want to identify areas that are regenerating and redeveloping the surroundings. This kind of activity often pushes property prices higher, which can deliver appreciation over time. Look to up-and-coming cities that are attracting those participating in the London exodus and experiencing swathes of regeneration, such as Leeds.
What is a good rental yield on property in the UK?
Rental yields are arguably one of the most important metrics for prospective investors to consider, but what is a good rental yield?
The average rental yield in the UK currently sits at 5.8% based on an average property purchase cost of £295,000 and an average monthly rent of £1,354, meaning anything over this amount is considered an above-average – or good – rental yield.
The likes of Leeds and Manchester are far surpassing the UK average and are prime examples of some of the highest rental yields in the UK, achieving yields of 5.41% and 5.61% respectively. This isn’t to mention that certain postcodes will achieve even greater yields, which is why it is important to carry out diligent local research before you purchase your next buy-to-let investment property. You can check out our Best Places To Invest In UK Property In 2026 guide for a postcode breakdown of the best cities in the UK for yields.