Hello readers,

With 2026 kicking off to a strong start as the FTSE 100 breaks 10,000 points for the first time there are green shoots showing already but it’s early days.

I wanted to put together an article with some predictions for the year ahead, but before we start let’s see my predictions for 2025 and how they shaped up. You can read my 2025 predictions here and I have summarised below.

• House prices to rise by 2 – 2.5% – We have seen a slightly lower rate here for 2025, with prices rising by just 1.1% as of November
• Mortgage rates to drop to around 4% – The base rate drops have helped here, with rates now sitting firmly around the 4% mark and actually expected to drop further into the 3% area in 2026
• Stamp duty changes to impact buyer activity – This has been partly the case for the buy to let market, but actually the reverse has been true with first time buyers being the largest purchasing group
• Rents to rise by 4% in the south east – Nationally, rents were up by 2.3% for the year, but interestingly the south east saw a small drop of 1.1% in the average asking rent.
• Renters rights bill likely to move forward – As you will know, the renters rights bill has now passed and will be implemented during 2026

2026 will be set against the backdrop of changing legislation and as usual, it will be interesting to see where we land by December. Here are the key points you will want to know.

House prices to rise by 2-3%

The prediction for 2026 is that first time buyers are likely to drive sales with slightly higher growth than 2025, but not dramatically.

There are a lot of predictions when you look online that range from 1% to 4%, but the mid to upper end is likely to be more realistic. This could mean For the Medway market, a 3% increase would add around £8,900 to the average house price.

From the graph below, you will see how we can expect growth of around 4% in 2027 and 5.5% in 2028, so a strong few years and of these predictions are true the total additional value added to Medway properties over 2026 – 2028 could be just under £39k!

Base rate to drop to 3.25% and inflation to hit 2.5%

It’s widely predicted that the base rate will drop to 3.5% by mid 2026, with a further drop expected to hit 3.25% by the end of the year.

This is likely to be accompanied by an inflation drop to 2.5% by December, bringing positive signs for 2027. It’s likely that this will lead to lower mortgage rates but not until the second half of the year.

Renters Rights Bill implementation starting

I won’t take up space here outlining the details of the renters rights bill as you can read the detail in my article here and I will keep you up to date as the implementation timeline progresses.

The first action that landlords will need to take however, is in April where they will need to supply tenants with an information sheet that is due to be published in March.

You can read the full timeline in my article above.

EPC Changes

One to look at here is any news on the proposed EPC minimum for the private rental sector to change from a grade E to grade C. Proposals are for new tenancies to be impacted by this in 2028 and all tenancies 2030, but no formal decision has been reached.

I am absolutely certain that changes are coming here, but the challenge for landlords – particularly in Medway – is how the cost of works such as external wall insulation can reach into the tens of thousands of pounds. With no formal decision, landlords are rightly not going to spend these kind of sums.

My concern is that the timeline here is now too short, with an undersupply of trades and clear knowledge of EPCs to hit 2030. Can you imagine a whole road of Medway properties installing external wall insulation?!

This is one to watch closely as my feeling is that indecision here is likely to restrict supply and contribute to increased rents.

Something investors will be acutely aware of is how 2026 will see further professionalism of the private rental sector, tax rises for landlords who own property in their own name and a continued shift to the benefits of investing in a limited company.

Whilst the Renters Rights Bill will undoubtedly concern investors, for those doing the right thing there’s nothing to worry about – it’s simply a change to how they operate and you will see that from 2027 onward we are expecting to see a leap in house prices so my advice would be that if you’re looking to expand, 2026 could be your last year before prices take a leap!

Is there anything that stands out for you? I’d be interested to hear your thoughts and as usual, you can reach me by email on hasan@home-share.co.uk.

Hasan