By Nick Leeming, chairman and national estate agents, Jackson-Stops, and Sarah Leslie, lettings manager at Jackson-Stops Sevenoaks.
National outlook
House prices will rise between two and three per cent next year as the UK’s housing market shifts from subdued to steady, and normality resumes for the first time since the pre-Covid era, according to new findings from national estate agent Jackson-Stops.
The chancellor’s recent Budget has now passed, easing immediate concerns around more punitive wealth and property taxes, albeit perhaps not permanently. Combined with anticipated interest rate cuts, this is likely to give many vendors and buyers the confidence to move forward with their plans and make a move.
In January, it will be six years since the ‘Boris Bounce’, the onset of Covid-19 and a prolonged period of disruption and uncertainty in the housing market. The six-week closure of the housing market was followed by the race for space, boosted by the short-term stamp duty holiday. The 2022 emergency budget threw the housing market into turmoil as historically low interest rates soared and post-Covid inflation took hold.
Unnaturally high price growth in coastal and rural Britain then began to unravel, expedited by the sell-off of second homes under pressure from the increasingly heavy burden of regulation on individual landlords and second home owners. 2024 and 2025 were dogged by political instability around the general election and leading up to a well-trailed budget.
Nick comments: “Interest rates are expected to settle in the mid-threes, already factored in by many mortgage lenders. This improving outlook is helping to restore confidence across the market. The first quarter of the year is set to be particularly busy, driven by pent-up demand that built ahead of the Budget and is expected to carry through into next year, reinforcing a spring bounce that should be more pronounced than the long-term norm.”
“While much of the industry was uneasy about the kite-flying in the run-up to the Budget, the final outcome was better than initially feared. This has created the conditions for an unexpected ‘Reeves rebound’, giving buyers the reassurance they needed to proceed with their plans and move forward.”
“Following almost six years of exceptional volatility driven by Covid, fiscal shocks and political uncertainty, 2026 is now expected to mark a return to a more stable and recognisable housing market.”
Prime regional markets to rebound in 2026
Labour’s proposed mansion tax, due to be introduced from 2028, appears less impactful than initially suggested. The annual levy is set at £2,500 for homes valued above £2million and £7,500 for properties exceeding £5million. Jackson-Stops expects this to have little effect on buyer appetite at this level of the market, though there are concerns around how properties will be valued in practice and how the valuation process will be administered.
Nick continues: “Council tax reform is long overdue, but it’s far from simple. The current system is still based on property bands set in 1991 using “drive-by” valuations and even then the process cost around £19million to do. Trying to repeat something on that scale today would be hugely expensive, and relying on automated valuation models (AVMs) instead is not a realistic alternative for accurate results.”
“While AVMs may offer a faster alternative, they are notoriously unreliable for higher-value or unique properties, risking significant inaccuracies. That raises serious questions about how updated valuations will be established in practice, whether they will come from statistical modelling, market data or a hybrid approach, and how disputes will be managed. Errors or inconsistencies could open the door to appeals and legal challenges.”
While the full implications of council tax reform remain some way off, the Budget has already acted as a catalyst for buyer activity in the prime market. In fact, Jackson-Stops agents report a flurry of offers, exchanges and completions of deals worth more than £1,000,000 in the immediate aftermath of the Budget, most notably in prime central London (PCL), Cheshire’s Golden Triangle and the Cotswolds. This initial December rush, unusual for two weeks before Christmas, may be an early indicator for the spring selling season. According to Jackson-Stops agents, vendors are lining up to either launch in January or are preparing for sale in the spring.
Nick says: “The urgency to agree deals in December suggests that buyers believe the prime regional market offers good value for money and they want to secure their property at that price now. The market is set for a modest uplift next year.”
Research from Jackson-Stops on the prime market supports this rebound. To buy the top 1% of homes outside London you need 25% less than three years ago, from £1,670,000 in 2022 to £1,250,000 in 2025.
Nick says: “For decades, the prime market has defied gravity, consistently outpacing every other segment. Our data shows that 2022 was likely the peak of that 30-year cycle with realignment happening ever since. Prices at the very top have been, on average, softening faster than any time since records began, but this trend looks set to change.”
This softening seems to have ended with the Autumn Budget as is evident in the following locations.
Lettings outlook
Sarah Leslie, lettings manager at Jackson-Stops Sevenoaks, comments: “While rents have remained robust throughout 2025, we are seeing clear price sensitivity among tenants. Properties marketed above the prevailing rate are taking longer to let, whereas correctly priced homes continue to perform well. This trend is evident across all levels, as households remain highly conscious of their budgets.”
“Sevenoaks remains a supply constrained market, with tenant demand continuing to exceed available stock. While renters are increasingly price sensitive, the lack of supply, particularly for well-located family houses, is continuing to underpin rental values.”
“Although some landlords have chosen to sell this year, this cannot be attributed solely to the forthcoming implementation of the Renters’ Rights Act or proposed EPC changes. Rather, it reflects the cumulative impact of regulatory and cost pressures over the past decade. For well-prepared landlords working with experienced agents, these reforms are manageable. The changes have, however, reinforced the importance of professional advice, particularly around tenant suitability and compliance.”
“Tenant priorities have also evolved and we expect these trends to persist into 2026. Demand remains strongest for houses with private outdoor space, alongside properties offering good access to amenities and transport links. With more businesses requiring a return to office-based working, proximity to railway stations has become increasingly important, especially as station parking can be limited and costs continue to rise. As a result, tenants are more focused than ever on value for money.”
“Looking ahead, we expect rents to continue rising. Further regulatory changes, including tax adjustments and mandatory landlord registration, will increase costs for landlords, which are likely to be reflected in rental pricing. In this environment, accurate pricing and informed, strategic management will be critical.”
