UK home gross sales ‘set to edge down in 2026 amid tight affordability’

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Your assist makes all of the distinction. Learn extra Home gross sales will edge down subsequent 12 months amid tight affordability for debtors, in line with a forecast from a banking and finance trade physique.

UK Finance mentioned it expects round 1.20 million home gross sales in 2026 and 2027, down from 1.21 million this 12 months.

Lending for home purchases grew by 22% this 12 months to succeed in £176 billion, with a notable spike earlier than the stamp obligation improve in April, UK Finance mentioned.

Subsequent 12 months, it forecasts simply 2% progress, to succeed in £180 billion, as affordability pressures grow to be tougher as a consequence of mortgage funds remaining excessive in contrast with debtors’ incomes.

New buy-to-let (BTL) buy lending was up by 11% in 2025 to succeed in £11 billion. Subsequent 12 months, UK Finance forecasts lending to see no change, with progress anticipated to be affected by taxes and regulation.

The report mentioned there was robust progress in mortgage refinancing within the second half of this 12 months as extra clients reached the tip of fixed-rate offers.

Some 1.6 million fixed-rate mortgages expired in 2025 and round 1.8 million are as a consequence of expire in 2026.

The subsequent Financial institution of England base fee determination is because of be introduced on Thursday, giving some individuals trying to take out a mortgage an early Christmas current if the speed is minimize.

UK Finance mentioned mortgage arrears ranges fell this 12 months to 92,100 from 104,800 the earlier 12 months. It expects arrears to fall by 5% in 2026 to 87,500.

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The report additionally mentioned mortgaged house repossessions rose this 12 months because the trade and courts moved again in the direction of regular ranges of exercise after the coronavirus pandemic.

An estimated 8,600 repossessions happened in 2025 and UK Finance expects a 9% improve in 2026 to 9,400.

Its report mentioned: “Sturdy underwriting requirements have helped maintain arrears ranges on mortgages written since 2014 to an absolute minimal.

“The rise in arrears seen although the worst of the cost-of-living disaster was modest and largely concentrated amongst older mortgages that wouldn't have the identical stage of resilience.”

UK Finance mentioned repossession is a “final resort” and assist is out there from lenders. Details about assist is on the UK Finance web site.

James Tatch, head of analytics at UK Finance, mentioned: “The mortgage market confirmed energy in 2025, notably for home purchases. However even with welcome tweaks to lending rules this 12 months, affordability is now very tight and that is more likely to restrict borrowing choices for potential consumers in 2026.

“There was anticipated progress in remortgage exercise this 12 months, and with extra households coming off their mounted charges subsequent 12 months, we count on to see additional progress in 2026.

“In the meantime, the variety of clients in arrears continued to enhance as price and fee pressures eased, and we at the moment are transferring in the direction of the historic lows seen in 2022. Though the variety of possessions rose, they continue to be very low by pre-pandemic comparisons. We do count on a small rise subsequent 12 months, however possessions will stay at low volumes.

“As at all times, assist is out there for patrons who're anxious about paying their mortgage. Converse to your lender as early as attainable to discover the tailor-made assist choices they've accessible.”