23rd December 2025

Grounds for Residential Market Optimism in 2026

As the dust begins to settle on the housing market in 2025, there is cautious optimism for residential sales next year.

Strangely though and after all the speculation, the recent Budget offered little for the housing market. No stamp duty reform, no meaningful support for first-time buyers and a new tax on higher-value properties that raises as many questions as it answers.

Stamp duty remains an outdated tax that restricts mobility and puts the brakes on economic activity. The wider property market represents a significant portion of the economy – when transactions flow, solicitors, surveyors, mortgage brokers and removal companies all benefit. We remain strong believers that there’s a need for fundamental reform to allow the market to function more effectively.

We’ve already seen evidence of what happens when taxes on property increase. In our region where council tax on second homes is likely to double over time, it means owners will look to sell with more homes available. Similar dynamics could play out at the higher end of the market when that new surcharge takes effect in 2028.

On a more positive note, the Bank of England has cut interest rates five times since the start of this Parliament. According to the Budget, this translates to savings of around £1,200 a year on a typical new mortgage. With polls showing nearly 80% of economists expecting further cuts in 2026, and improving affordability remains the key to unlocking activity for buyers and sellers.