While mortgage markets became increasingly competitive as the Bank of England cut interest rates four times, house price growth was muted. Indeed, Nationwide put annual price growth at just +0.6% in 2025, as — in the face of an uncertain economic outlook — underlying buyer confidence remained relatively fragile.

That, combined with a higher stamp duty surcharge on the purchase of additional homes introduced in 2024, gave investors and developers in particular little margin for error.

It also meant that owner-occupiers became somewhat more circumspect; less prepared to push toward the edge of their budgets, especially once the stamp duty holiday came to an end on 31 March.

A mixed bag of regulation

And from a regulatory perspective, too, it was something of a mixed bag.

On the one hand, we saw the less rigid application of mortgage regulations, as the FCA and lenders together put a renewed focus on increasing first-time buyer (FTB) activity. At the same time, the government continued to loosen planning regulations in an equally concerted effort to increase housing delivery.

The first of these measures supported record mortgage lending to FTBs of £83bn in the year to the end of September, despite turgid underlying market conditions. But in the absence of a more direct demand stimulus, neither the number of new homes nor the planning consents on which they rely increased.

Small, medium, and large housebuilders alike remained cautious about the prospects for the markets they were selling into, as development costs continued to rise on the back of more demanding building regulations.

Meanwhile, the prospect of the Renters’ Rights Act hung over the investor market for almost the whole year. It was not until 27 October that it gained Royal Assent. And it was several weeks later that the implementation date of 1 May 2026 was made known.

And though the 2024 Leasehold Reform Act had already passed through Parliament, it remained subject to a legal challenge. That challenge was eventually dismissed by the High Court in October, although the decision remains open to appeal, meaning a degree of uncertainty continues to surround the value of ground rents.

An air of caution in 2025

Added to all of this was a late Budget, precipitated by a prolonged period of unheralded speculation and rumour, much of it focused on the taxation of property.

That all contributed to an air of caution at auction, especially after the stamp duty holiday ended in March. Buyers became more cost-conscious and, as our survey shows, more selective.

And so, yes, the sales success rate for sales of residential lots fell — but not dramatically.

In 2024, it was 75%. In 2025, it was 73%. That is a testament to the enduring appeal of residential bricks and mortar, especially when the price is right and the potential returns warrant the investment.

But more than that, it reflected the continued impetus for private and public sector owners to restructure their portfolios.

Responding to a new environment

The resolve of smaller, more indebted Buy to Let (BTL) landlords was severely tested. Larger landlords have looked better placed to cope with strengthened tenants’ rights, the introduction of local authority licencing schemes and the prospective challenge of having to meet more stringent energy efficiency standards.

Some have seen this as an opportunity to expand and exploit the economies of scale, which increasingly look like an important component of running a successful rental business.

The drive to zero carbon has continued to provide a catalyst for Registered Providers to review their portfolios, especially given the returns from their core portfolios are crucial to increasing their development aspirations that central government is so keen to unlock.

Our Buyers’ Survey and the Outlook for 2026 (and beyond)

As we look further into 2026, we expect these factors to continue to drive stock to auction. In particular, there is potential for a further wave of sales of BTL properties during the first half of the year now that the Renters’ Rights Act has become law.

Notably, just under 20% of respondents to our survey said they would look to reduce the size of their residential portfolio, 39% confirmed they would maintain their existing investment approach, while 6% were looking to increase their exposure.

Investors are likely to be more yield aware this year. This is likely to drive residential demand to auctions specifically, given the returns on offer relative to the wider market.

But despite the expectation of further cuts in the bank base rate, we expect buyers across the market to remain relatively cautious and risk-averse in 2026. This reflects the weakness in lead indicators of housing demand that were also evident in our survey responses.

We are forecasting average house price growth of just 2% this year; a delayed recovery that reflects the underlying short-term economic outlook.

But we expect the outlook to improve from 2027 onwards as the economy picks up, thereby encouraging prospective buyers to take advantage of improved affordability. And with the FCA taking a further look at relaxing mortgage regulation to encourage more demand from FTBs and the self-employed, so the pool of potential buyers should start to open up over the next 12 to 24 months.

Against that backdrop, we are forecasting price growth of 22% over the next five years, albeit weighted to later cycle markets away from London and the South East.

That means those cannily buying at auction in 2026 should benefit from market-led growth on top of the inherent value already on offer.

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