In early 2026, the UK residential property market is showing the first clear signs of recovery after nearly two years of slowdown. According to major property platforms and brokerage reports, housing supply has increased by approximately 6% year-on-year, while the number of new listings has reached its highest level in the past decade.

📉 This shift is taking place against the backdrop of gradually declining borrowing costs. In 2023–2024, the market was under pressure as the Bank of England’s base rate rose above 5%, significantly reducing mortgage affordability and transaction volumes. In 2026, the situation is beginning to change, with fixed mortgage rates falling to around 4–4.5%, the lowest level in the past four years.

The mortgage market is the key driver of this recovery. According to banks and brokers, the number of approved mortgages has increased by approximately 15–20% year-on-year, while the share of transactions involving financing has once again exceeded 60%. In some regions, monthly mortgage payments are now comparable to or even lower than rental costs, which is shifting buyer behaviour back towards homeownership.

📈 Against this backdrop, the market is gradually moving into a more balanced phase. The increase in supply reflects the return of sellers who had postponed transactions during periods of higher borrowing costs. At the same time, deferred demand is re-entering the market, with industry estimates suggesting that up to 20–30% of buyers who previously delayed purchases are now actively considering transactions again.

Current market structure:

— housing supply has increased by around 6% year-on-year, providing buyers with more choice;
— average time on market has risen to 45–60 days, indicating a reduction in urgency-driven demand;
— annual price growth remains moderate at approximately 1–3%, without sharp fluctuations;
— average discounts from asking prices are around 3–5%, bringing negotiation back into transactions.

🌍 Regional dynamics remain uneven. In London, prices are largely stable or show modest growth of 0–2%, while in northern regions growth can reach 3–5%. At the same time, the rental market remains tight, with rents in major cities increasing by 8–10% year-on-year, supporting investment demand.

💼 The combination of moderate price growth, increased supply, and declining mortgage rates creates conditions that are often viewed as an entry window for investors. Buyers can enter the market without the risk of peak pricing while benefiting from improved access to financing and stable rental income.

🤝 The Realting team works with the UK market through local partners, allowing you to find properties on our platform that match your investment or personal goals.