UK house prices bounce back in January as analysts predict 2%-4% rise in 2026

The Guardian - World NewsCenter-LeftEN 3 min read 100% complete by Lauren AlmeidaFebruary 2, 2026 at 10:18 AM

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medium article 3 min

UK house prices rebounded in January, rising 0.3% after a December dip, according to Nationwide. The average home price is now £270,873, 1% higher than last year. Economists predict growth in the property market in 2026, forecasting a 2%-4% rise, driven by falling mortgage rates and reduced budget uncertainty. While mortgage approvals remain slightly below pre-pandemic levels, housing market activity is expected to recover. Despite improving affordability, some analysts caution that fragile demand and economic data could still put pressure on prices and transaction levels. The Bank of England cut interest rates in December following a fall in inflation, but rates remain above the 2% target.

Key Entities & Roles

Key Player Opposition Context

Megan Greene 40% Tom Bill 50% Knight Frank 50% Bank of England ×250% Robert Gardner ×260% Capital Economics 60% Rachel Reeves 70% Nationwide ×380% UK ×490%

Keywords

uk house prices 90% mortgage rates 70% house price forecast 60% property market 60% interest rates 50% market activity 50% mortgage approvals 40% inflation 40%

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Positive

Score: 0.20

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Source

The Guardian - World News

Political Lean

Center-Left (-0.40)

Far LeftCenterFar Right

Classification Confidence

90%

Geographic Perspective

United Kingdom

This article was automatically classified using rule-based analysis. The political bias score ranges from -1 (far left) to +1 (far right).

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uk house prices mortgage rates house price forecast property market interest rates market activity mortgage approvals inflation

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