Rightmove: Asking prices set to rise 2% in 2026 after post-Budget market rebound

The housing market is in for a positive 2026 following a slower second half of 2025, according to the latest House Price Index (HPI) from Rightmove.

Property asking prices could rise by 2% next year due to a drop in interest rates, a high number of homes for sale and a market rebound post-Budget.

The property portal is predicting the Boxing Day bounce to be larger than usual on its platform, as many who paused their plans in anticipation of the Budget rejoin the market.

A recent survey of 10,000 potential movers by Rightmove found nearly one in five were waiting for the outcome of the annual fiscal event before making next steps.

Separate data from the website suggests the premium housing market in London is already showing positive signs post-Budget – the number of new sellers coming onto the upper-end of the market was up by 24% in the week after the Budget, compared to the week before.

Rightmove said the number of homes for sale on its platform being at a decade-high level, as well as falling mortgage rates would also lead to a surge in asking prices across 2026.

Colleen Babcock, property expert at Rightmove, said: “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.”

Asking prices drop in December

Month-on-month, asking prices fell by 1.8% between November and December, from £364,833 to £358,138, according to Rightmove. This follows the same percentage drop between October and November, when prices sank from £371,422 to £364,833.

Prices commonly fall in December, in part due to the busy Christmas period, but Rightmove said this year’s percentage decrease was larger than the 10-year average of 1.4%.

Average asking prices across England, Wales and Scotland end 2025 0.6% lower than December 2024 (-£2,059).

Some regions saw growth annually, however – prices in the North West of England rose by 2.6% year-on-year, while the West Midlands recorded growth of 1.3%. Prices in the East Midlands and Yorkshire and the Humber increased by 0.8% and 0.7% over the 12-month period, respectively.

Prices fell considerably across the south of England between 2024 and 2025, with the South West and South East experiencing 2.7% drops. Asking price growth in London flatlined.

Could cheaper mortgage costs be on the way?

Mortgage holders have been gritting their teeth since 2022 when interest rates started rising due to soaring inflation, caused in part by strong global demand for goods as well as higher energy and fuel prices.

The average rate for a two-year fixed residential mortgage peaked at 6.86% in July 2023, from 2.52% in July 2021, according to Moneyfacts. Rates have fallen since then, with the average rate on a two-year fix 4.84% as of 12 December.

The Bank of England base rate is likely to fall lower in 2026.

In its November Monetary Policy Report, the Bank of England’s Monetary Policy Committee (MPC) projected inflation to slow to 3.2% by March 2026. In October it stood at 3.6%.

Meanwhile the MPC forecasts the base rate will fall from a current level of 4% to 3.5% by the end of 2026.

The market is widely expecting the base rate to be lowered by 25 basis points to 3.75% when the MPC next meets on 18 December.

Nick Mendes, mortgage technical manager at broker John Charcol, said: “Looking ahead to 2026, the direction of travel for mortgage costs is likely to be lower, but the pace of improvement should be viewed as gradual rather than dramatic.

“That said, mortgage rates will not fall in a straight line and will remain sensitive to inflation data, wage growth and how confident markets are that rate cuts will stick.”