The British property portal Rightmove has corrected its expectations for asking prices this year, now forecasting a decline of up to 2%. This adjustment comes despite a brief upturn following the change of government. Previously, the portal had predicted a 2% increase in asking prices for 2026, which highlights the significant shift in market assessment.
The revised forecast reflects a more cautious stance, influenced by various macroeconomic factors. Rising mortgage rates and persistent inflation are weighing on the purchasing power of potential property buyers. General uncertainty regarding economic development also contributes to this subdued expectation, although the market showed short-term relief after the political realignment.
Factors for the price adjustment
The reasons for the new analysis are multifaceted. The affordability of homeownership remains a central challenge, particularly for first-time buyers. While demand for housing is structurally high, more restrictive lending in combination with higher financing costs is dampening the number of transactions and thus price development. Price formation is therefore driven more by households' real ability to pay than by mere demand.
Experts at the property portal point out that the original forecast was based on a different economic environment. Current inflation rates and subsequent interest rate adjustments by the Bank of England have significantly altered the framework conditions for the real estate market. These developments necessitate a re-evaluation of price dynamics, which is now reflected in the current forecast.
Market outlook
A 2% drop in asking prices indicates a stabilisation of the market, where sellers may need to make realistic price adjustments to facilitate transactions. This could provide some relief for buyers who have faced rising costs in recent months. Further developments will depend heavily on monetary policy and the general economic situation, with continued volatility not to be ruled out.
- —Forecast adjusted from +2% to -2% for asking prices.
- —Triggered by increased interest rates and inflation.
- —Short-term upturn after government change has not become sustained.
- —Household purchasing power remains under pressure.
