<h1>UK Housing Market Forecast for 2025-2026</h1>
<h2>Introduction</h2>
<p>The UK housing market continues to face significant challenges in 2025. This analysis examines current trends and provides a forecast for the next 12 months.</p>
<h2>Current Market Conditions</h2>
<p>Housing prices have increased by 6.8% year-over-year, with the average home now costing £295,000 nationwide. London prices have seen an even steeper climb at 8.3%.</p>
<h2>Supply and Demand Gap</h2>
<p>New housing starts have improved to 205,000 annually, but still fall short of the estimated 250,000 units needed to meet demand.</p>
<h2>Interest Rate Impact</h2>
<p>With Bank of England rates at 4.25%, mortgage affordability remains a significant hurdle for first-time buyers.</p>
<h2>Regional Disparities</h2>
<p>While London and the South East face the most severe affordability challenges, regional cities like Manchester and Birmingham are now seeing similar pressures.</p>
<h2>Forecast</h2>
<p>We predict continued price growth of 4-6% over the next 12 months, with potential moderation if supply improvements can be maintained.</p>


Cost of LivingUnited Kingdom

Housing & Property

UK Housing Market Forecast 2025