UK set for booming mortgage market

Mortgage brokers are predicting that the UK mortgage market is going to be booming in 2026. This is partly due to regulators introducing more relaxed requirements from lenders, including allowing lenders to have more flexibility around lending to people with a higher loan-to-income ratio.

The available products on the market are growing and now include some mortgage products that enable people to borrow up to six times their income. Other product variations include low deposit mortgages and “joint borrower, sole proprietor” mortgages, which allow family and friends to provide financial support to help first-time buyers get onto the property ladder.

Data shared by Moneyfacts revealed that the number of mortgage products currently available is at the highest level in 18 years1 and across the mortgage industry, there are high expectations that the market will become even more competitive throughout the year.

Rachel Springall, a finance expert at Moneyfacts provided some insights into the consensus within the industry:

"Expectations are high for a booming market in 2026. Mortgage rates are lower year-on-year, and the choice of deals is abundant."

Mortgage rates have been steadily falling since August 2024 and as wages have been rising in the UK, this means that mortgage costs as a share of income are lower than they have been for several years.

Variances across local housing markets

While house pricing has stabilised somewhat recently, some housing commentators have explained that there are notable differences across local housing markets. Buying agent, Henry Pryor shared:

"There are distinct differences as always as you move to higher prices and from parish to parish but in general the UK housing market remains healthy and largely predictable."

Over the last few months, there have been signs of caution among potential buyers. Firstly, in the lead-up to the Autumn Budget, there was a market slowdown as people waited to learn what tax changes would be announced.

The Autumn Budget was then closely followed by the holiday period, when the housing market is typically at its slowest. Both buyers and sellers tend to prefer to wait until the holiday season is over, so there is usually a significant increase in property transactions around March and April.

With around 1.8 million¹ borrowers coming to the end of fixed rate deals this year and stronger competition in the mortgage market, the volume of mortgage applications in the next few months could spike. However, experts have also warned that wider global and economic uncertainty may still prevent any major improvements to the property market.

Positive signs for first-time buyers in 2026

For first-time buyers in particular, 2026 is looking positive based on the wider range of mortgage products, more flexibility around affordability stress testing and interest rates hitting the lowest rate in three years.

Sources

https://www.bbc.co.uk/news/articles/c4gv7vl06e1o

All the information in this article is correct as of the date of publishing. The opinions expressed in this publication are those of the authors Euxton Mortgage Market. The information provided in this article, including text, graphics and images does not, and is not intended to, substitute advice; instead, all information, content and materials available in this article are for general informational purposes only. Information in this article may not constitute the most up-to-date legal or other information.

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February 2026