Mish Liyanage – Property Expert

After several years of uncertainty, disruption and overreaction, the UK housing market is beginning to show something it has been missing for a long time: stability.

This shift hasn’t happened overnight, and it isn’t driven by a single policy change or economic event. Instead, it’s the result of gradual adjustment — from buyers, sellers, lenders and policymakers — all recalibrating to a post-pandemic reality.

As 2026 approaches, the market is no longer lurching between extremes. It’s settling.

The End of Panic-Driven Behaviour

One of the clearest signs of returning stability is the disappearance of panic from transactions.

During periods of rapid price growth, decisions were rushed and emotionally driven. Buyers stretched affordability, sellers chased peak pricing, and negotiations became increasingly detached from fundamentals.

That behaviour has eased.

Today’s market is characterised by calmer decision-making, longer consideration periods and more grounded expectations. Properties are being priced to sell, not to test the market, and buyers are approaching purchases with planning rather than urgency. This change alone marks a fundamental improvement in market health.

Buyers and Sellers Are Aligned Again

Stability returns when expectations meet reality — and that alignment is finally happening.

Sellers have adjusted to the fact that ultra-low interest rates and instant price jumps are no longer the norm. Buyers, equally, have adapted to higher borrowing costs and are budgeting accordingly. That mutual adjustment has removed much of the friction that previously stalled transactions.

As a result, deals are progressing more smoothly, and transaction volumes are gradually returning to levels that resemble pre-Covid norms.

Lending Conditions Are No Longer Shifting Underfoot

Another critical factor behind renewed stability is consistency in lending.

Mortgage rates may still be higher than historic lows, but they are no longer swinging unpredictably. Lenders have priced risk more accurately, stress testing is clearer, and borrowers have a better understanding of what is realistically achievable.

When financing conditions stabilise, confidence follows — not just among buyers, but across the entire property chain.

Fewer Extremes, More Balance

A stable market isn’t one where prices race upwards. It’s one where extremes are reduced.

Sharp price surges, sudden drops and stalled sales all undermine confidence. The current environment, by contrast, is seeing fewer dramatic swings and more incremental movement. This balance allows the market to function as intended — enabling people to move home, invest sensibly and plan for the long term.

Why This Matters Going Into 2026

Stability is the foundation for everything that follows.

Without it, affordability can’t improve, first-time buyers remain excluded, and long-term investment becomes speculative rather than strategic. With it, confidence returns, transactions increase and price growth becomes sustainable rather than fragile.

As the UK housing market moves into 2026, the narrative is shifting away from crisis and correction — and towards normalisation.

That, quietly, is the most positive signal the market has seen in years.