This week was full of trading updates from developers. They all struggled through a challenging 2025 but are reemerging unscathed with cautious optimism for the end of 2026. RICS surveyors echoed this, predicting residential activity and prices will pick up in affordable areas after a year of budget and economic uncertainty restrained a market keen to move on if the price is right. This has some facing a loss, denting prime egos and shattering others’ perception of homeownership leaving them stranded in unsafe buildings. Welcome to another UK Property News Recap – 16.01.2026.
Blackstone offloading the debt
Blackstone sheds a “leaf” as “living” proves expensive when you borrow on the cheap. Rising interest rates have led Blackstone to appoint advisers to sell its rental home business Leaf Living for around £1bn.
Sellers sell at a loss
Prime central London property and flats shrouded in building safety doubt shed pounds, leaving many sellers, if they want to move on, at a loss. In London, flat owners were 6x more likely to sell at a loss than homeowners according to Hamptons data. Yet, homes over the £2m mark could face further falls of 5% over 2026 in response to the Mansion Tax due in 2028. The London market remains divided and confused. For all the losses there are still gains, depending on when you bought and what’s been done. As a result, pricing is erratic and can be very misguided vs realistic. Knowing the difference is key.
Northern regions to dominate 2026 house price growth
The portal Zoopla predicts average UK house prices will increase by 1.5 per cent in 2026 but all is not equal. Northern, and more affordable regions look set to move on up while southern regions step back, creating opportunities for those who can afford to buy in those areas.
Scotland has the best market conditions and markets for prices to rise; the top 10 spots were all to be found here, Motherwell coming out first closely followed by Glasgow. Wigan was the only exception sneaking in at the number 10 spot with 3% house growth. For southerners however, budget-enlightened buyers will start to make their move but only if the price is right. As a result, house price growth is expected to be only around 0-1%.
2026 product choices expand with rate cuts
The average 2 year fixed mortgage rate was down by 0.03 percentage points month-on-month compared with the 0.08% recorded at the start of December 2025. Meanwhile the average five-year fixed rate wasn’t flinching from 4.91% this week. Tracker variable mortgages over two years fell on average from 4.66% to 4.44% month-on-month along with the average SVR; down 0.56% to 7.25% from 7.81%. Downward movement is good but outgoings will still be excruciating – those who have been holding out for a better rate before remortgage may be more incentivised to switch to a fixed rate now.
The Centre for Policy Studies finds development numbers lacking
Labour promised a building revolution but to date tools have been laid dormant under the weight of interest rates. The government has continued to wax lyrical on planning reform, 520 times according to Hansard but delivery has proved elusive not only due to high inflation but the government’s budget speculation that caused the market to stall further. As a result, all English region starts were fewer than in the previous year with only 4,170 new homes in the capital, down 72% on 2023/24. With only 115,700 new starts under Labour’s belt for its first year in office it came as no surprise when various housing ministers were wheeled out to gloss over their dismal annual report, claiming their “ambitious’ house target of 1.5m homes was always only meant to be achieved over the course of their first term in office.
Building will pick up from 2027/8 but for now, no one is eager to comply until there is a market with proceedable buyers.
£1.5m homes come under Mansion Tax scrutiny
The government has laid the foundations to draw more homes into the mansion tax bracket in the future. Houses believed to be worth more than £1.5 million are to be revalued via sales data, aerial maps and past planning applications to provide a valuation.
Developer trading tread 2025 water
Developer Vistry saw sales fall 9% last year compared with 2024 efforts, with partner funded units down by c. 8%. The PRS (private rented sales) sector was reported to have paused delivery while they refinanced which contributed to a c.25% reduction in PRS volumes versus the prior year. The group’s total adjusted revenue was also down marginally from £4.3bn to £4.2bn but the total average selling price rose 3%, driven by more affordable regions. Moving forward they expect things to slowly improve, boosted by the £50m received from Homes England as part of the £2bn of additional grant funding, enabling them to build on Social and affordable housing.
Taylor Wimpey’s latest trading update, however, showed a level of resilience during uncertain times. Total completions edged up along with pricing but forward orders fell 0.5% on 2024 levels. Given this and low single digit build cost inflation they expect the group’s operating profit margin to be lower in 2026 than in 2025.
Persimmon Homes, on the other hand, saw a 12% rise in completions and a 5% rise to their average selling price. Despite the increase, the group’s underlying housing operating margin is expected to be towards the lower end of the guided range of 14.2% to 14.5. Moving forward they expect market conditions to improve in 2026 but rising regulatory costs will restrain significant growth but not enable it.
Construction starts prep for 2026
Construction data firm Glenigan’s review of the three months to the end of December 2025, reads like a market prepping for work. Despite a sluggish end to the year, not helped by budget speculation, projects starts on site rose by 7%. Non-residential activity dominated with office construction rising 11%, Industrial projects up 41% and community and amenity projects up 37%. The Health and Hotel & Leisure sector however wasn’t quite so lucky down -25% on the previous quarter. Residential activity also fell; the private sector saw 15% falls during Q.4, however social housing was on the rise, up 28%.
Meanwhile the ONS estimated construction output in November fell 1.3%: both new work and repair and maintenance fell by 1.9% and 0.4%.
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Surveyors look with hope to 2026
RICS Residential Market Survey for December 2025 showed a market preparing to move on from budget uncertainty galvanised by reduced interest rates and the fear of further rental growth. Despite house prices falling further in December and more acutely in London and the South East; Scotland and Northern Ireland continued to see prices rise. Moving forward, house price falls are expected to stabilise while further growth is anticipated in these and other affordable regions, spurred on by first time buyers and investors on the hunt for a good yield. As a result, sentiment amongst those surveyed improved for sales in the short term with many expecting momentum to build throughout the course of the year.
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In the rental sector, RICS surveyors saw seasonal falls in demand but any hope of a reprieve from spiralling rents was curtailed by a distinct lack of new stock. Landlords continue to flee the market in more expensive areas, preferring greater yields in cheaper regions.
Rightmove’s Rental trends tracker
Looking back at the rental market in Q4 2025, Rightmove found the average advertised rent outside of London fell 1.1%, shaving £15 off the average asking price outside of London to £1,370 per calendar month. Despite the number of available homes rising by 9% on last year’s supply, competition remained higher than in 2019. As a result Rightmove predicts that average rents will increase by a further 2% in 2026, further squeezing tenants.
The Bank of England survey on credit conditions
Buyers in need of finance retreated in Q4 and are expected to further retreat in Q1, however demand for secured lending for remortgaging was unchanged in Q4 but expected to increase in Q1 as fixed rates become more attractive than trackers and standard variable rates.
Foxtons’ acquisitions build on revenue numbers
Foxtons continued to hold its own; total revenue up 5% to £172m according to their latest trading update for the year.
Acquisitions in the rental market largely drove growth and offset marginal sales losses.
In this sector, the year was a tale of two halves. The first half was strong off the back of first time buyers trying to beat the stamp duty final whistle while the second half was almost rained off by Budget and economic uncertainty. Meanwhile buyers continue to take Foxtons’ financing calls, increasing revenue for the group by 10%.
That concludes this week’s UK Property News Recap – 16.01.2026. Any comments or suggestions please get in touch.
