House prices are expected to rise by 2% in 2026 fuelled by improved buyer affordability, Rightmove has predicted.
The average two-year fixed rate mortgage is now 4.33% compared to 5.08% last year.
With house prices being cheaper than a year ago, rising average wages and a relaxing of lending criteria, activity is expected to rebound after what has been a subdued second half of 2025.
Matt Smith, Rightmove’s mortgage expert, said: “We’re expecting to end the year with a Bank Rate cut, which would be good for confidence heading into the Rightmove Boxing Day Bounce.
“It’s unlikely that it will cause much movement in mortgage rates – the markets are very much expecting December’s cut to go ahead, and lenders have shown their hand early, cutting rates and competing to secure end-of-year business.
“The headline is that home-movers will be entering 2026 looking at cheaper average mortgage rates than they were at the beginning of 2025, helping affordability.
“Those who are seeing slightly lower house prices in their area compared to last year and may have also had an end-of-year pay rise, will see their affordability improved further.
“Many home-movers will also see that the amount that they can borrow has increased, as lender have been rolling out the Loan-To-Income and stress rate changes that were permitted by the regulator earlier this year.”
Average new seller asking prices fell by 1.8% (-£6,695) in December £358,138.
This larger than usual December drop means that prices are 0.6% (-£2,059) lower at the end of 2025 than in 2024.
On the upside, there are early signs of post-Budget rebound, with number of top-end London sellers up by 24% week-on-week.
Colleen Babcock, property expert at Rightmove, said: “Lower price growth supported buyer affordability and drove activity in the first half of the year, even after the April stamp duty deadline in England.
“In the second half of 2025, uncertainty caused by rumours of property tax changes in November’s Budget swirled, some from as early as August.
“This had an impact on pricing and activity, as sellers tried to entice nervous buyers. The market will soon benefit from the traditional boost in home-moving activity from Boxing Day.
“Rightmove’s Boxing Day Bounce is an annual event where we see many begin or resume their plans to move after the distraction of Christmas.
“With the turkey and trimmings barely off the table, each year we see people heading straight to Rightmove to browse the fresh listings for sale and imagine how different next Christmas could look.”