Property Market Forecast For 2026
As we step into 2026, we see the local property market shifting. After several years shaped by economic uncertainty and changing buyer behaviour, the picture now looks more stable, with modest price growth, improving affordability and a gradual return of buyer confidence.
National indices suggest the UK housing market is set for measured growth in 2026. Forecasters such as Rightmove, Zoopla and wider industry analysts are pointing to price increases in the region of 1.5 to 2.5%, driven by an expected uplift in activity. This momentum is likely to build further into 2027 as confidence increases.
Here in Dorset and across the South West, the foundations of a healthier market are already taking shape. Since the Autumn Budget, uncertainty has eased, and decision-making has accelerated. As a result, we are starting 2026 with over 30 new property launches and relaunches as part of our biggest ever Boxing Day Boom campaign, reflecting renewed seller confidence to satisfy pent-up buyer demand.
Each month, we analyse the number of active buyers registered on our database against the number of available properties to track shifts in supply and demand. While this ratio has softened over the course of the year, it finished 2025 at 19 buyers for every available property. Rather than signalling a slowdown, this change points to a more balanced market. Across our network, viewing levels throughout December remained strong, showing that registered buyers are not only present but motivated, and our teams were agreeing sales right up to the end of the year, indicating that serious intent has replaced the more cautious, speculative behaviour seen earlier in the cycle.
Property Trends for 2026
One of the most influential drivers for the year ahead is the direction of borrowing costs. Following several Bank of England interest rate cuts in 2025, economists and mortgage strategists expect further easing in 2026. This should continue to support affordability and encourage activity, particularly among first-time buyers. At a local level, this is likely to give renewed confidence to buyers who paused their plans during 2024 and 2025.
We anticipate interest being strongest in the price brackets aligned with local wages and employment hubs across Dorset and the wider South West, where the improved mortgage accessibility is already beginning to unlock movement, and should, in turn, filter through to the higher end of the market.
Buyer priorities will remain consistent. Homes offering functional space and areas suitable for home working will attract strong interest, due to the long-term impact of hybrid working. Energy efficiency and sustainability features are also increasingly influencing purchasing decisions, particularly as running costs remain front of mind. As the South West continues to attract households relocating from larger cities, proximity to good schools, transport links and lifestyle amenities remains a key driver of demand.
Lower yet stabilised mortgage rates, easing inflation, and a clearer fiscal outlook are encouraging households and investors to plan with greater certainty. The Autumn Budget played a role in this shift by reducing the level of unknowns that had previously caused hesitation, allowing decisions to move forward rather than be delayed.
The Property Forecast for the South West
The region’s historic resilience continues to be underpinned by lifestyle appeal, strong commuter connections and quality-of-life factors that attract families and professionals alike. As with the rest of the UK, price growth is expected to remain steady rather than dramatic, and values are likely to track broadly in line with, and in some cases slightly ahead of, national forecasts, particularly where properties are priced realistically for owner-occupiers and first-time buyers.
The rental market also remains a key feature of the South West landscape. Ongoing demand from professionals, students and relocating households is expected to keep rental values firm, continuing to support landlords and long-term investors.
With mortgage costs stabilising and modest wage growth continuing, buyers in entry-level and mid-market price bands should find conditions more favourable in 2026 than they have been in recent years.
What This Means for You
For buyers, 2026 presents an opportunity to operate in a market that feels more predictable and less reactive. Improved mortgage conditions and steady pricing trends allow for more confident decision-making, particularly in the sub-£400,000 sector, where demand remains robust, and supply is improving.
For sellers, realistic pricing and thoughtful presentation will continue to be key. Homes that offer quality, space and practical living are likely to perform well early in the year, with activity typically strengthening during the post-Christmas and New Year period. This pattern was evident last year, and we expect a similar dynamic again in 2026.
For investors and landlords, the outlook is more balanced. While increased regulation and tax pressures remain part of the landscape, consistent tenant demand and rising rents are helping to support yields, which may offset some of the additional costs and preserve the long-term appeal of property investment in the region.
In Summary
We believe 2026 will be defined by renewed confidence, measured growth and healthier market dynamics. While dramatic price increases are not anticipated, the overriding trend across Dorset and the South West is one of stability, supported by improved affordability, sustained demand and a clearer economic backdrop.
Whether you are considering buying, selling or investing, understanding these market conditions will help you make informed decisions in the year ahead. If you would like to discuss what this means for your own plans, or how to maximise your chances of a successful sale or purchase in 2026, please do not hesitate to get in touch.
If you would like an up-to-date appraisal of your property or impartial guidance on its likely valuation, our team at DOMVS will be pleased to help.
