Having seen an artificially deflated market in the second half of 2025, primarily due to the budget build up, which was unnecessary, from June through till November, we now appear to be able to forecast ahead based on a steady market and economy. Interest rates and inflation appear to be coming down, and this is good for the housing market, although we have a tremendous shortage of stock available within the region.
The predictions are very much geared to varying price levels, where the demand exceeds supply and therefore significant price variation. For the volume of the market, up to perhaps £750,000, we see increased demand outstripping supply and therefore prices will remain strong and hold well with instances in popular locations of best & final offers continuing on properties. Overall, our prediction is that these properties will rise in value by perhaps 5% or more in the year.
Between the price range of £750,000 and £1.5 Million, the equilibrium between supply of property and demand will be similar to recent times and prices we predict will hold.
The demand for properties from £1.5 Million, to perhaps £3 Million, should increase since the worries and concerns of many have been overcome by the actual budget in 2025 and therefore the “panic effect” has subsided. This held back some of the demand in 2025, so we are hoping that greater numbers of buyers will return and prices will hold, but in some cases see a little increase in numbers as we gain greater confidence in the economy and in interest rates.
For those houses over £3 Million in value, the economy continues to be a significant factor and gross predictions are not as great as we would like them to be. This market will remain a little unstable and exceptional homes will experience individual demand due to the high quality and unique nature of the properties.
It is always fair to reflect that individual one off houses with high standards of presentation and luxury can create a premium value because people are working too hard and too long to be able to afford to improve, renovate and extend themselves, and therefore we hope greater numbers of buyers will continue to pay premium prices for luxurious one off houses which are fitted out to a very individual and unique level.
The volumes throughout 2026 are likely to increase as demand has been held back in the past. The cost of housing and inflation is likely to be modest, but through the volumes increasing, demand will, in certain cases, overcome supply and this will naturally increase values.
At Sanderson Young we are here to ensure that we maximize the value of all property by presenting it to the highest standard. Our commitment to that in 2026 remains our number one priority.
If you are looking to sell your property or want an update on the value of your area, please give us a call on 0191 213 0033.
Duncan G Young
Chairman
SANDERSON YOUNG