The property market in mid-2026 is one of contradictions. Prices remain stubbornly close to record highs. Demand persists. And yet, for many buyers, sellers, and homeowners, something feels distinctly off. There is a hesitancy in the air that is difficult to pin down but impossible to ignore.
Here, we unpack the five forces currently shaping the market, and what they mean for anyone looking to buy, sell, or remortgage in the months ahead.
The Shadow of the War in Iran
Geopolitical uncertainty has a long history of unsettling property markets, and the ongoing conflict in Iran is no exception. While the UK housing market is not directly exposed to events in the Middle East, the knock-on effects (energy price volatility, inflationary pressure, and a broader mood of caution among buyers and lenders alike) have contributed to a notable stalling in transaction volumes.
Sellers are staying put. Buyers are pausing. Solicitors report longer decision-making timescales. The war has not caused a crash, but it has added a layer of hesitation that is quietly suppressing the market’s natural momentum.
Prices Remain Close to Record Highs
Despite the subdued mood, house prices in England and Wales continue to hold firm, currently averaging £284,862, a figure that remains within touching distance of all-time highs.
This tells an important story. Supply is still constrained, and enough demand exists, particularly at the top and bottom of the market, to prevent any meaningful correction. For sellers, this is broadly reassuring. For first-time buyers, it remains deeply challenging. The market is expensive, and it is staying expensive.
For those in our patch of South-West London, prime locations and immaculate properties continue to command a premium. Central and South-West London has shown characteristic resilience, underpinned by strong fundamentals: transport links, green space, regeneration, and a consistent flow of professional buyers.
A Mortgage Affordability Crisis
Prices holding near record highs would be one thing if borrowing were easy. It is not. The housing market is squarely in the grip of a mortgage affordability crisis, and it is reshaping buyer behaviour in real time.
The combination of high house prices and elevated mortgage rates has pushed monthly repayments beyond the reach of many households that, on paper, are doing well. Stress tests remain strict. Lenders are cautious. And many would-be buyers are simply sitting on their hands, waiting for conditions to improve before committing to a purchase.
This is not a crisis of confidence in property as an asset class, it is a crisis of access. The desire to own is there; the financial pathway to do so has narrowed considerably.
Remortgage Approvals at Their Highest Since 2008
One of the most striking data points of the current moment is this: remortgage approvals are now at their highest level since the financial crisis of 2008. For many households, fixed-rate deals arranged during the ultra-low interest rate era of 2020–2022 are rolling off, and the reality of today’s rates is landing hard.
Homeowners are acting, shopping around, locking in new deals, and in some cases releasing equity to manage wider financial pressures. This surge in remortgage activity reflects both the scale of the rate shock and the pragmatism of British homeowners determined to manage their way through it.
If you are approaching the end of a fixed-rate deal, the message is clear: act early, take advice, and don’t leave it to the last minute. The remortgage market is busy, and the best rates are going quickly.
The Base Rate: Holding at 3.75%
All eyes remain on the Bank of England. When the Monetary Policy Committee meets in June, the Base Rate is widely expected to hold at 3.75%, providing a degree of short-term predictability, even if the longer-term trajectory remains uncertain.
A hold, rather than a cut, will disappoint those hoping for immediate relief on borrowing costs. But it signals that the Bank remains watchful, balancing its commitment to bringing inflation fully under control against the very real pressures facing mortgage holders and businesses alike.
The direction of travel; slowly, carefully downward, remains intact. But anyone waiting for a dramatic rate cut to transform their affordability position may be waiting longer than they’d like.
Our View
The market in 2026 is navigating a genuinely difficult set of circumstances. Geopolitical turbulence, high prices, stretched affordability, a remortgaging wave, and a cautious Bank of England do not make for easy conditions. But they do not make for a broken market either.
Property in the right locations that are well-presented, well-priced, and well-marketed continue to find buyers. And for those with equity behind them, or the patience to wait for the right home, there are opportunities emerging that were not there eighteen months ago.
As ever, if you’d like to talk through what any of this means for your own position; whether you’re thinking of buying, selling, or simply want to know what your home might be worth today, we are here.
Radstock Property | Central and South-West London’s Independent Estate Agent
