Carter Jonas says the residential sales market will be shaped by a small number of practical drivers over the next 12 months, with affordability, confidence and ease of transacting central to a steadier year of activity.
The national property consultancy says the lending environment will be the most immediate driver, with broader confidence and transaction reform also expected to shape buyer behaviour throughout 2026.
Mortgage Availability and Affordability
The more near-term impact on the market could be the shape of mortgage availability and rates in the next 12 months. Recent efforts by the Financial Conduct Authority (FCA) to encourage lenders to refine affordability assessments, including easing stress tests and potentially offering higher loan-to-income (LTI) ratios, are expected to incrementally increase access to mortgage finance, particularly for first-time buyers, throughout the next year.
Lisa Simon, Head of Residential at Carter Jonas, said: “The big story of 2026 could be thresholds. Affordability has been the number one gatekeeper, but the good news is that wage growth has outpaced house prices over the past year, which is quietly improving affordability for many households. Despite challenges like the phasing out of Help to Buy and some high‑value owners pausing ahead of the 2028 High-Value Council Tax surcharge, we’re starting to see the conditions for a more positive stance.”
Looking at the next 12 months, it’s also widely expected that there will be at least one further official interest rate cut which would clearly help reduce the cost of borrowing. This movement will improve overall affordability and encourage a wider cohort of prospective buyers into homeownership.”
Lisa adds: “When costs feel manageable rather than prohibitive, decisions come off pause and that shift, even if gradual, can turn ‘not yet’ into ‘let’s go’.”
Confidence and Certainty
More generally, economic and political stability always improves consumer confidence. Increased certainty whether it be domestic stability or even wider global geopolitical issues which will hopefully ease over the next year, will encourage people to make larger financial commitments such as buying and selling homes. Improvement in this area will stimulate market activity and transaction volumes.
“What we’ve seen in 2025 is a cautious market that contributed to a ‘wait and see’ approach for months,” Lisa comments. “People want to move – the appetite is there- but they need to feel the ground is stable beneath them. For most households confidence comes when surprises stop. When people sense predictability across borrowing costs, lending decisions and timelines, confidence to commit rebounds.”
Government legislation
Government proposals currently under consultation aim to reform and expedite the home buying and selling process. These changes are mainly focused on speeding up transactions and reducing the rate of fall-throughs. Anything which will help facilitate smoother, quicker and less onerous transactional administration will certainly give households increased confidence to buy and sell homes and this could therefore stimulate activity.
Lisa said “Speed is attractive but certainty matters more. If reforms can reduce the rate of fall-throughs and add some predictability to timescales, that fundamentally changes the psychology of moving. People are far more willing to commit when they believe the transaction will complete.”
Long-term supply challenges
The long-term health of the housing market fundamentally relies on addressing the persistent supply issues. While resolving the complex challenges facing the construction and building sector requires extensive action, progress on recommendations, such as those from the new towns taskforce, would represent a positive step toward increasing the rate of new home completions.
Lisa said: “The housing market is still feeling the void left by the end of Help to Buy. The sharp decline in new-build sales over the last few years has directly contributed to the current stagnation in construction, a trend that negatively impacts everything from the supply chain to local employment. A new initiative designed to boost demand at the entry-level would serve as a vital catalyst, stimulating both housebuilding and the broader economy and we would be very supportive of this.”