Before we talk about 2026, I want to be completely honest about 2025 and what the market is doing currently. In a word, it’s rubbish at the moment.
Although prices haven’t nosedived, the volume of properties coming onto the market and the volume of people looking to buy is very low – but these two things are balancing out, so prices are holding up, but there’s not a great deal of activity. This is down to a whole load of circumstantial stuff. The November budget was a big factor, as the government had encouraged speculation about extra taxes and stamp duty on property sales. And once this turned out to be just a whole load of political hot-air, we had December upon us, which is usually the quietest time of the year.
We’ve also seen an unprecedented number of deals falling through. This is a typical sign that consumer confidence is at a very low level. Even though buyers and sellers always pin the reason for aborting the transaction on something tangible – like a missing building regulations certificate or planning document from 20 years ago, the real reason for the fall-through is nearly always that they don’t think they’re making the right decision about buying. The last time this happened was in 2019, when we could couldn’t decide whether we wanted to leave the EU.
So my thinking is that we’re probably coming to the end of a really suppressed time when people haven’t been buying in the usual numbers.
But regardless of the state of the economy, people will still need to move house. It follows then that there might well be some pent-up demand, as people have held off due to the lack of confidence in the market. Then when the market starts moving, it should move pretty well.
There are several ingredients that I think will kick start the market that we need to thing about.
The first of these is that the bank of England are set to reduce interest rates this week and rumour has it that we’re looking at a quarter of 1%.
Whilst that may sound trivial, in real terms this means that interest payments will drop by about 6%, so that does make quite a big difference to the cost of borrowing.
The second ingredient is that wages are going up – mainly driven by the increase in minimum wages that is set to come in next April. Again, you wouldn’t expect this to have a massive bearing on the market, but what it does mean is that many more people will be able to get onto the property ladder. Take the example of a couple working full time… The new minimum wage will translate to a combined income of around £52k. If they’ve managed to save up a small deposit, then they would be able to buy a property at around £240k with a lot of lenders.
Now this probably isn’t significant in areas like London, but if you were to be located in much of the North, then that sort of money could buy you a 3 bedroom detached house. What we tend to find is that when part of the market picks up, then there’s a ripple effect meaning the rest of the market often follows. So maybe this will affect things more than you might first think.
And the third ingredient to my predicted price-rise mixture is that tenants are being kicked out of their rental properties at an unprecedented rate.
The new Renters Rights Act is so ridiculous that many landlords have simply had enough and are looking to sell. In my own experience, this is resulting in a procession of Section 21’s being released onto the very tenants who need rental properties the most. These tenants are likely to be forced to purchase, if they can, which could result in yet another flurry of activity.
I’ve no idea what the other tenants will do, who won’t have the means to buy. This article isn’t about the renters rights act, but it is hard to ignore. If you’ve not caught up on this and you want to either laugh or cry, then you might want to look at it. In my opinion, it’s the most ridiculous piece of legislation a government has put out since they made people walk in front of cars waving a flag.
Whilst I could be completely wrong about this, my expectation is that we could see a very different level of activity after Christmas. It’s hard to predict exactly when this will kick in and it might not kick in at all, but my best guess is that we’ll see a flurry of activity just after Christmas. I’d like to hope that it will continue into January, but traditionally, we often see it take a while for momentum to get going again.
I’m advising clients who are looking to market in the next few weeks to hold off until the week after Christmas. There’s virtually no activity at the moment, but that’s to be expected for the time of year. I’ve advised several of my clients that we should look to remarket on 29th December, so that could be a busy time.
I’ve heard that other agents are still pushing the boxing day launch. In my mind, that’s a complete myth, but some agents do use the volume of internet traffic on boxing day as an excuse to win instructions. It’s a complete farse, as there’s little point launching a new listing on the internet if there’s not going to be anyone available to answer the calls. This is a just a classic example of the kind of thinking that our industry attracts – I’ll say no more, but I do advise you not to list on boxing day… It’s not a great idea!
I’ve also heard of one or two agents looking to launch their new properties in Mid January. Whilst I suspect this might be partially down the agent’s holiday plans, there’s a danger they might miss the new year flurry of activity – of course – if there is one.
And in terms of pricing, I don’t think there’s been a massive difference over the last few months. There’s definitely a consensus that prices have dropped over the last couple of years, and they have been dropping since the Liz Truss budget, but there’s not been a great nose-dive, and I understand that in some areas, marginal growth has happened in the intervening period.
If you’re considering selling, then it’s really important to get the price right. Don’t go for the highest valuation, as this is probably just a measure of how much the agent will lie to win your business.
Do your own research. Look at sold prices and other properties that are on the market to see where yours should sit. It’s not rocket science, but don’t whatever you do, make the mistake of setting the price too high. The market is price sensitive, so overpricing is likely to result in your property becoming stale before it gets offers.
And if you are looking to buy, then it could be a good time to get in before the market picks up.
Of course, I could be completely wrong about all of this. There are so many factors that will influence the property market, so please don’t take my predictions as advice. The market could do completely the opposite to what I’m currently thinking. Who knows what is around the corner for our economy – There are any number of factors that could propel the market forward and there are possibly more factors that could stop it dead. We’ll just have to wait and see.
Watch the video below:
December 2025