When will the UK property market buck up? and is buying your own property still a good investment?
Yes — I think the UK property market will improve, but I would not expect a dramatic boom. The more likely outcome is a gradual recovery over the next 2–3 years.
Where we are now
The latest official data is quite revealing:
UK house prices were up only 2.0% year-on-year to June 2026, with the average property at about £272,000.
In England, annual growth was only 1.8%.
London was actually down 2.5%, while the North West was up 4.7%.
Mortgage rates remain the major obstacle. A typical two-year fixed mortgage is around 5.6%, so borrowing is still expensive.
The Bank of England is currently at 3.75%, and economists in the latest Reuters poll largely expect it to remain there through the rest of 2026 because inflation has started rising again.
So I would describe the market as bottoming rather than booming.
When does it “buck up”?
My best estimate:
Period My expectation
Rest of 2026 🟡 Sluggish, roughly flat–2% growth
2027 🟢 Recovery becomes more obvious, perhaps 2–4%
2028–29 🟢 Potentially stronger, perhaps 3–5% annually
Next major boom 🔵 Possible, but I wouldn’t base an investment decision on it
The important thing is that houses don’t need interest rates to return to 2% for the market to recover. What matters is affordability gradually improving through a combination of:
lower mortgage rates + rising wages + stable employment + house prices not running ahead of incomes.
The OBR’s latest assessment is quite interesting: it expects house-price inflation to average just over 2½% over its forecast period, broadly in line with income growth.
That is much more modest than the spectacular gains people became accustomed to before 2022.
Is buying your own home still a good investment?
For somewhere you intend to live for 10+ years: yes, I think it remains one of the best financial decisions available to many people.
But I would make an important distinction:
Your own home is not quite the same as an investment property.
Your home provides you with:
1. Capital appreciation
If you buy a £500,000 property and it eventually rises to £650,000, you’ve gained £150,000 in capital value.
2. Inflation protection
Over long periods, the replacement cost of land, labour and building materials tends to rise with inflation.
3. Rent avoidance
This is the really important one.
If you own your house outright, you aren’t paying rent for the rest of your life. That is effectively a very valuable tax-free economic return on the property.
4. Leverage
This is unique.
Suppose you buy a £500,000 house with a £100,000 deposit and £400,000 mortgage.
If the house rises 10% to £550,000, you’ve gained £50,000 on £100,000 of equity — 50%, before mortgage interest and costs.
Of course, leverage works in reverse when prices fall.
But there’s a catch
I would not buy a property today simply because you expect house prices to shoot up.
That is no longer the compelling argument.
The better argument is:
“I can buy a good property at a reasonable price, finance it sensibly, live in it for a long time, and gradually build equity while avoiding rent.”
That’s considerably more attractive.
The OBR also expects housing supply to increase as planning reforms take effect, which it estimates could reduce average house prices by about 0.8% by 2029 compared with its baseline.
That makes another 2000–2021-style explosion in prices less likely.
Where I think the really interesting opportunity lies
There is a big difference between buying an ordinary house and buying the right house.
I would favour:
Freehold house + good location + scarce supply + good transport + attractive local amenities + reasonable running costs.
I would be much more cautious about:
Expensive leasehold flat + high service charges + poor energy efficiency + large development + lots of competing properties for sale.
The latter market is particularly weak at present. Almost 87% of leasehold flats listed in England and Wales in Q4 2025 were still unsold six months later, compared with 69% for two-bedroom freehold houses.
That tells you something important: not all property is going to recover at the same rate.
And there’s another very important point for you
Given your interest in investments and relatively substantial sums, I wouldn’t automatically assume that putting, say, £500,000–£1m into a house is necessarily better than putting that capital into a diversified investment portfolio.
I’d look at the property’s implied return.
For example:
£750,000 house
Suppose:
Property = £750,000
Long-term price appreciation = 3% = £22,500
Equivalent rent = perhaps £30,000
Maintenance/insurance/etc. = perhaps £7,500
You have potentially around £45,000–£50,000 of annual economic benefit, before financing and transaction costs.
That’s potentially attractive.
But if you pay £750,000 for a property in an area where prices stagnate for ten years, while your money could have earned 5–7% elsewhere, the opportunity cost becomes significant.
My overall verdict
For a home: ⭐⭐⭐⭐⭐
For a 10–20 year horizon: ⭐⭐⭐⭐⭐
For a 3–5 year horizon: ⭐⭐⭐
For speculative short-term appreciation: ⭐⭐
For a carefully selected freehold house: ⭐⭐⭐⭐⭐
For an expensive leasehold flat: ⭐⭐–⭐⭐⭐
And I would not wait for the “bottom”.
Nobody knows exactly when it occurs. In fact, if mortgage rates begin falling and confidence returns, the best properties can start rising before the statistics tell you the market has recovered.
If I were buying now
I’d want to negotiate hard rather than wait for a huge market crash.
The current sluggishness gives buyers something they haven’t had for years: negotiating power.