Regional Property Market Update Autumn 2026: Southern Home Counties
The housing market has shown real resilience this summer, with transactions holding up and buyers still willing to move when the right property comes along. As we head into the key autumn season, a new Prime Minister brings the chance to reset the policy agenda ahead of the Budget.
Rates on Hold
Inflation fell more than expected to 2.6% in June¹, though forecasts for 2026 are materially higher than they were at the start of the year (now 3.4% vs 2.2%), reflecting the Iran conflict’s implications for global supply chains². The Bank of England held interest rates at 3.75% in July, citing the ongoing hostilities, and is expected to hold through year-end, though mortgage rates may continue to price in the higher-risk environment until tensions are resolved. Earnings growth has been slowing but remains solid, with a stronger forecast at midyear than at the start, helping to rebuild household finances a little.
Hopes for an Autumn Recovery
This year’s summer slowdown has been sharper than usual, with elevated mortgage rates weighing on buyers, who have also been distracted by sunshine, football and political change. Average asking prices dropped 1.0% this month³, well above the ten-year average July fall of 0.2%. Historically, this gives way to a September bounce-back, with asking prices up 0.5% on average from August to September over the past five years⁴. Activity is likely to pick up in autumn, provided rates hold steady and the picture clears following Burnham’s first Budget. Mortgage approvals ticked up in June, pointing to underlying market resilience, though remain 10% lower year-on-year⁵.
Mortgage Market
Mortgage availability increased for a third consecutive month, with the number of products on offer rising by 45 to 7,177 in June⁶. The market continued to recover following widespread product withdrawals earlier in the year, although there were still 307 fewer deals available than at the start of March. However, after recent falls, average mortgage rates have risen again as renewed tensions in the Middle East feed through to homeowners⁶. Recent projections by the Bank of England suggest just over five million homeowners on fixed-rate mortgages will see their repayments rise by the end of 2028, as they roll off current deals onto higher rates.
¹ONS ²HM Treasury Consensus Forecasts Dec 2025 and July 2026 ³Rightmove ⁴PriceHubble, Rightmove 2021–2025 ⁵Bank of England ⁶Moneyfacts
What’s in Store for the Rental Market?
The average rent reached £1,369 in July, up 4.3% year on year¹. With peak rental season in full swing, RICS also reported a pickup in renter demand, reaching the strongest level since May 2025. After major changes to the rental sector earlier this year, the Renters’ Rights Act enters its next phase from late 2026. Phase 2 introduces a Private Rented Sector Database, requiring landlords to register themselves and their properties, rolled out gradually by area, plus a free Landlord Ombudsman service to resolve tenant-landlord disputes without going to court, though full rollout isn’t expected until around 2028.
Property transactions stabilised in June, following two months of decline, with 98,700 recorded and up 2.5% year-on-year¹. Zooming out, the market is showing resilience: 468,830 transactions were completed in the first half of 2026, 14% higher than the same period in 2024 and just 4% below last year, showing that buyers are still willing to move when the right property comes along at the right price. This suggests the market is maintaining baseline activity despite headwinds, though the absence of typical seasonal growth points to continued caution ahead of anticipated policy changes. Both activity and pricing remain stronger in less affordability-constrained areas, with local trends often diverging from the national picture. Average property values in the region were up 1.2% on last year’s levels. Strongest price growth was evident in Surrey Heath, up 6.0%, ahead of the next top performers Hart (3.3%) and Epsom and Ewell (2.9%).
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