In the 18 years since the 2008 housing crisis, the housing market has been overshadowed by a cloud of uncertainty; mortgage rates have shot up and come down, property prices have fluctuated, and on top of all of that, the cost of living itself has climbed to new heights that many consider to be untenable.

For buyers, sellers and investors out there, understanding the market – knowing if it’s recovering, slowing down or entering a new phase – will always be a challenge (unless you’re lucky and own a crystal ball). With so many factors influencing the market, it’s important to look past the headlines and fear, and into the most influential trends that are actually having the biggest impact on the housing market. In this article, we’re going to take a closer look at these trends and evaluate what’s happening in the housing market right now and what it could mean for your next move. 

Are House Prices Rising or Falling?

While we all have access to national statistics that give us a broad idea of where house prices stand, they aren’t always reliable. Most properties simply don’t align with these figures for a wide variety of reasons, like location and property type. Oftentimes, one region will go through a period of intense growth, while another might see a huge decline. Another thing to consider is that – especially in the current market – asking prices rarely match what buyers ultimately pay. Properties priced realistically are more likely to attract interest, while overpriced homes may require reductions to secure a sale.

The factors that influence local property values the most tend to be job opportunities, general cost of living, and the availability of housing in the area. If you’re scouting for a home, or work in the industry and are doing research, getting a solid understanding of these factors will likely give you a clearer picture of current prices and their trajectory in the future. 

Nationwide recently reported that UK house prices rose by 1.6% (year on year) in August 2026, while official figures showed a 1.4% YoY increase in July. When you look at individual regions, you’ll get an idea of just how stark this variability can be. For example, in the North East, prices rose by 4.9%, but fell by 3.3% in London.

Mortgage Rates and Affordability

Mortgage rates have, and always will, play a huge role when it comes to determining house prices. The Bank of England is legally required by the government to try and keep inflation at 2%, so when inflation is too high, it changes its own base rate, which is essentially the benchmark for the UK’s financial system. And when this benchmark changes, it changes the cost of borrowing for high street banks, which, in turn, makes them adjust their mortgage rates. 

When mortgage rates are lower, homes are more affordable and more buyers enter the market, increasing activity in the market, with increased sales rates. Higher borrowing costs, on the other hand, dampen buyer confidence due to higher mortgage rates.

In the end, it’s up to buyers to decide if their long-term financial circumstances make the monthly repayments feasible or not, instead of only focusing on the house price.

Supply and Demand

The balance between available properties and people planning to buy plays a significant role in determining housing market conditions. When demand exceeds supply, particularly in desirable locations, competition will likely increase property prices. However, when the number of homes for sale increases, buyers will have more choice and more negotiating power, potentially encouraging sellers to adjust their asking prices.

Local employment opportunities, population growth and new housing developments also influence demand. Areas with strong job markets and limited housing availability may experience sustained interest, while locations with more properties than prospective buyers could see slower sales.

Frequently Asked Questions What’s Really Happening in the Housing Market Right Now?