The Intermediary – January 2026 - Flipbook - Page 20
RESIDENTIAL
Opinion
Market expecta
he outlook for 2026
feels more positive than
the autumn of 2025,
which was plagued
by uncertainty amid
pre-Budget speculation
of a raid on the housing market in the
form of increased taxes.
What came to pass wasn’t as bad as
many had feared, although there was
a notable lack of encouragement or
impetus from the Government to help
first-time buyers – the lifeblood of
the market – onto the property ladder
through some form of revised Help to
Buy scheme or stamp duty concession.
Improving transaction levels by
encouraging first-time buyers to
purchase their first home, enabling
second-steppers and beyond to move
up the ladder, is crucial to a thriving
housing market which also benefits
the wider economy.
T
Rate reductions
With the Budget out of the way,
confidence has improved and the
prospects are brighter. December’s
base rate cut to 3.75% meant interest
rates finished the year one percentage
point lower than they started, which
has had a huge impact on buyer and
seller activity.
Affordability is improving, albeit
slowly, as the cost of living remains
high. Lenders remain keen to lend and
have money available to do so; what’s
more, the subdued market at the end
of last year means they are keen to
make up business.
At the time of writing, HSBC,
Barclays and Halifax had already
reduced rates in January, with the
rest of the ‘big six’ expected to follow
before long.
Lenders remain keen
MARK HARRIS
is chief executive
at SPF Private Clients
to lend and have money
available to do so; what’s
more, the subdued market
at the end of last year
means they are keen to
make up business"
Market expectations are for one to
three base rate reductions this year
with base rate finally seling between
3% and 3.5%, as the Bank of England
closely monitors inflation, the labour
market and wage growth.
This will provide a welcome shot
in the arm for the housing market,
and will be particularly helpful to the
1.8 million homeowners who are due
to remortgage this year, according to
UK Finance.
Those on 5-year fixes in particular
will be moving off super-low rates and
while rock-boom deals are no longer
available, with leading 2-year fixes
starting from just over 3.5% and their
5-year equivalents starting from just
over 3.7%, and further gradual falls
expected, the situation is not as dire as
it might have been.
More than the numbers
Those lenders that can’t compete on
rate and jockey for position at the
top of the ‘best buy’ tables are likely
to focus on aracting business by
improving their criteria instead.
Smaller building societies and
specialist lenders will continue to
focus on their particular niches and
borrowers would do well to consult
a whole-of-market mortgage broker
when taking out a home loan to
ensure they don’t miss out on any
hidden ‘gems’.
In the first week of this month,
Nationwide and Halifax reported
on their house-price indices for
December, indicating that price
growth has slowed and, in some areas,
prices are falling.
Nationwide reports that the average
price fell to 0.6% in December from
1.8% in November and is forecasting
