What Could Happen to the UK Property Market Over the Next 12 Months?

Iran, Oil Prices, Interest Rates, Government Borrowing and the Cost of Living, Should You Still Move House?

An opinion piece by Jon Brierley, Founder & Managing Director of Lennon James Property

If you are thinking about moving house at the moment, I wouldn't blame you for wondering whether you should wait.

Turn on the television, open a newspaper or look at your phone and there seems to be another reason every day to worry about what might happen next.

War in the Middle East.

Oil above $100 a barrel.

The continuing war between Russia and Ukraine.

Inflation.

Higher energy bills.

Government borrowing.

Rising gilt yields.

Mortgage rates.

The cost of living.

An Autumn Budget approaching.

Political uncertainty.

And a housing market where buyers currently have considerably more choice than they have had for years.

Put all of those things together and it is very easy to arrive at one conclusion:

“Perhaps I should wait until things settle down.”

I completely understand that thinking.

But after spending the majority of my working life in property, first in estate agency, then more than 12 years at Rightmove working with estate agents and housebuilders across the UK, and now running Lennon James Property, I've learnt something about waiting for certainty.

It rarely arrives.

There is nearly always something happening that gives buyers and sellers a reason to wait.

And that's why my view of the next 12 months is probably more measured than either the very optimistic or very pessimistic predictions you'll read elsewhere.

I think the UK property market faces some genuine challenges.

Some could be significant.

But I also think there will continue to be people buying homes, selling homes and getting on with their lives.

Because there isn't really such a thing as one permanently “good” or “bad” property market.

Markets change.

And successful buyers and sellers adapt with them.

Where Is the UK Property Market Right Now?

Before looking forward, it's worth understanding where we are today.

The latest Rightmove data shows the average asking price of a newly listed property at £367,440, following a 0.7% monthly increase in September.

That's encouraging on the surface.

But underneath that headline is a much more complicated market.

There are currently more properties available to buy than at any point in the last 12 years, while the number of buyers making enquiries is 9% lower than a year ago.

The average two-year fixed mortgage rate had also risen to 5.29% in Rightmove's September data. Rightmove

Rightmove has subsequently revised its 2026 forecast and now believes average UK prices could finish the year somewhere between broadly flat and 2% lower, while emphasising significant regional variation. Rightmove

So this isn't a booming seller's market.

But nor is it a market that has stopped functioning.

That's an important distinction.

The Biggest Immediate Risk: The Conflict With Iran and Energy Prices

Six months ago, very few homeowners considering moving in 2026 would have had Iran near the top of their list of property-market considerations.

Today, it matters.

And this demonstrates perfectly why predicting the property market is so difficult.

The Bank of England says the prolonged Middle East conflict has pushed up crude oil, refined fuels, gas and electricity prices. Its Financial Policy Committee recently noted Brent crude above $100 per barrel, with higher energy prices creating a negative supply shock for the global economy. Bank of England

Why does a conflict thousands of miles away matter to somebody selling a three-bedroom house in Huntingdon?

Because eventually the economic chain can reach their front door.

Oil Doesn't Just Mean Petrol

When people hear “oil price”, they naturally think about filling the car.

But energy feeds into enormous parts of the economy.

Transport.

Manufacturing.

Agriculture.

Distribution.

Packaging.

Aviation.

Construction.

Food production.

Business operating costs.

Heating and electricity.

If energy remains expensive for a prolonged period, businesses eventually have to absorb those costs, become more efficient or pass some of them on to customers.

That can feed inflation.

And inflation is incredibly important to the housing market because of what happens next.

Inflation Could Keep Interest Rates Higher

UK CPI inflation was 3.1% in August, above the Bank of England's 2% target. Office for National Statistics

At its September meeting, the Bank held Bank Rate at 3.75%, but three of the nine Monetary Policy Committee members actually voted to increase it to 4%.

More importantly, the Bank has explicitly warned that if elevated energy prices persist and begin feeding more broadly into wages and prices, monetary policy may need to tighten.

Its own market commentary noted that quoted two-year fixed mortgage rates were around 0.95 percentage points higher than before the Middle East conflict began. Bank of England

That matters enormously for property.

Because ultimately:

House prices are heavily influenced by affordability.Mortgage Rates Matter More Than Headlines About House Prices

This is something I think gets overlooked.

Imagine somebody can comfortably afford £2,000 a month for their mortgage.

Their purchasing power depends heavily on the interest rate available to them.

If mortgage rates increase, the amount they can borrow within that same monthly budget falls.

Multiply that across thousands of buyers and you can see why borrowing costs influence property values.

It doesn't necessarily mean prices suddenly collapse.

More often, the market adjusts.

Buyers become more selective.

Negotiations become harder.

Properties take longer to sell.

Some buyers reduce their budget.

Some sellers become more realistic.

And transaction volumes can slow.

Could Interest Rates Rise Again?

Yes.

Could they fall?

Yes.

And that's exactly the point.

Nobody knows with certainty.

The Bank currently has Bank Rate at 3.75%, but the market path has become considerably less comfortable because of renewed inflation risks. Bank of England

If energy prices ease, inflationary pressure could diminish and the outlook could improve.

If the Middle East conflict escalates further, energy prices rise again and inflation becomes embedded, interest rates could remain higher for longer or potentially rise.

There are credible scenarios in both directions.

That's why I would be extremely wary of anybody confidently telling you exactly where mortgage rates will be next summer.

Then There Are Gilt Yields

This sounds technical, but it's becoming increasingly relevant to homeowners.

Gilts are UK government bonds.

When gilt yields rise significantly, it tells us something about the price investors are demanding to lend money to the Government.

UK gilt yields have recently risen sharply. The benchmark 10-year gilt yield has reached around 5.4%, its highest level since 2007 while 30-year yields have moved above 6% for the first time since 1998. Financial Times

The Bank of England has also highlighted rising sovereign bond yields as a financial-stability risk, noting that yields across several advanced economies have reached levels not seen since 2008. Bank of England

Why should somebody moving house care?

Because government borrowing costs, swap rates, bond markets and expectations for future interest rates all feed into wider financial conditions.

And those financial conditions ultimately influence the price lenders charge for mortgages.

Government Borrowing Matters

The UK Government has to borrow substantial amounts of money.

Investors therefore need confidence that lending to the UK represents an attractive risk-adjusted return.

If investors become more concerned about inflation, government spending, debt or fiscal credibility, they may demand higher yields.

Higher government borrowing costs can then create difficult choices.

Higher taxes.

Lower spending.

More borrowing.

Or some combination of all three.

And each of those can affect household confidence and disposable income.

This is why I think the Autumn Budget on 28 October could matter to the housing market.

The Office for Budget Responsibility is due to publish its latest economic and fiscal outlook alongside it. Office for Budget Responsibility

Markets will be watching closely.

So will I.

Could Political Uncertainty Affect the Property Market?

Absolutely.

But I wouldn't overstate the General Election angle.

There isn't currently a scheduled UK General Election within the next 12 months.

What we do have is political and fiscal uncertainty.

Budgets can change behaviour.

Tax changes can affect property decisions.

Changes to Stamp Duty can alter transaction patterns.

Changes affecting landlords can influence the rental and investment market.

Government spending and taxation decisions can influence consumer confidence.

And unexpected political events can move financial markets very quickly.

We've seen that before.

So politics matters.

But I'd be wary of delaying a house move purely because something might happen politically.

There will nearly always be another Budget, election, policy announcement or political controversy somewhere on the horizon.

The Cost of Living Is Still a Real Issue

This is probably the factor buyers actually feel most directly.

Forget economic terminology for a moment.

People know what leaves their bank account each month.

Mortgage.

Energy.

Food.

Fuel.

Council Tax.

Childcare.

Insurance.

Car payments.

Subscriptions.

Everything else.

If those costs rise, households have less disposable income.

That influences how comfortable somebody feels taking on a larger mortgage.

And confidence matters.

A buyer may technically be able to afford £500,000 but decide they're only comfortable spending £450,000.

That behaviour matters to the market.

Could We See Shortages?

Potentially.

Geopolitical conflict can disrupt global supply chains.

Energy supplies are an obvious concern, but shipping, food, commodities and manufacturing inputs can all be affected by conflict or trade disruption.

I wouldn't suggest that widespread UK shortages are inevitable, they aren't.

But supply disruption is another risk that could feed prices if global tensions worsen.

And again, that ultimately brings us back to inflation.

Russia and Ukraine Haven't Gone Away

While attention has understandably shifted towards Iran and the wider Middle East, the war in Ukraine continues.

Recent attacks have focused heavily on Russian energy infrastructure, with Ukraine claiming substantial damage to Russian refining capacity. The Guardian

The wider economic lesson is the same.

We live in an interconnected world.

Energy markets don't operate neatly within national borders.

Neither do financial markets.

Events in Russia, Ukraine, Iran, the United States, Europe or elsewhere can affect fuel prices, inflation expectations, government bond yields and ultimately UK borrowing costs.

The Cambridgeshire housing market isn't isolated from any of this.

But neither is it controlled by any single one of these factors.

There Are Other Risks We Shouldn't Ignore

Over the next 12 months, I'd also be watching employment.

If unemployment were to rise materially, that would concern me more than many of the headlines people tend to focus on.

Why?

Because employment supports mortgage affordability.

As long as people have secure jobs and incomes, many will continue making life decisions.

I'd also watch wage growth.

Consumer confidence.

Mortgage availability.

Housing supply.

New-build construction.

Tax policy.

Inflation.

And lender competition.

None exists in isolation.

But There Are Positive Factors Too

This is important because it's very easy to write an article like this and make everything sound terrifying.

There are also reasons for optimism.

The Bank of England says the UK banking system remains appropriately capitalised with high liquidity, and its previous stress testing suggests banks could withstand a significantly worse economic scenario while continuing to lend. Bank of England

The economy has also proved somewhat more resilient than expected despite higher energy and borrowing costs.

And mortgage lending continues.

People are still buying homes.

People are still selling homes.

Life hasn't stopped.

What About Cambridgeshire?

This is where national headlines become particularly dangerous.

There is no single UK property market.

And there isn't really one Cambridgeshire property market either.

The latest official figures put the average Cambridgeshire property price at approximately £339,095 in July 2026, 2.7% higher than a year earlier.

Cambridge itself was broadly flat at around £475,151. GOV.UK

In Huntingdonshire, one of our core markets at Lennon James, the average property price was approximately £308,000, up 3.1% year-on-year.

Detached properties averaged approximately £484,000, semi-detached homes £305,000, terraced homes £241,000 and flats approximately £149,000. Office for National Statistics

So while you may read a national headline saying:

“HOUSE PRICES FALL”

that doesn't automatically tell you what is happening to a detached house in Brampton.

Or a period property in St Ives.

Or a cottage in Hemingford Grey.

Or a family home in Huntingdon.

Or a bungalow in Ramsey.

Or a modern property at Alconbury Weald.

Property remains incredibly local.

Cambridgeshire Has Some Important Strengths

I remain positive about our part of the country over the long term.

We have Cambridge and its extraordinary employment and innovation economy.

Science.

Technology.

Life sciences.

Research.

Universities.

Major employers.

We have excellent strategic road connections through the A1 and A14.

We have rail connections from Huntingdon into London.

We have attractive market towns.

Historic villages.

Countryside.

Good schools.

And we have a wide range of price points.

That last point matters.

Somebody who finds Cambridge unaffordable may look further out.

St Ives.

Huntingdon.

Godmanchester.

Ramsey.

Somersham.

Sawtry.

Alconbury.

The surrounding villages.

Remote and hybrid working have also changed how some buyers assess distance.

People can increasingly make a trade off between location, space, lifestyle and value.

That creates opportunities for many of the areas we specialise in.

But Cambridgeshire Sellers Will Face More Competition

This is probably the immediate challenge I would focus on.

Nationally, Rightmove says buyers currently have the greatest choice of homes in 12 years.

When buyers have choice, sellers have competition.

And that's where the market changes.

A few years ago, buyers might have had five suitable properties to choose from.

Today they might have 15.

So being:

“on Rightmove”

isn't enough.

Your property has to earn attention.

This Is Why Marketing Matters More in a Difficult Market, Not Less

I have always believed strongly in property marketing.

But ironically, the market conditions we're discussing make it even more important.

When properties sell almost regardless of how they're presented, average marketing can get away with being average.

When buyers become selective, it can't.

Photography matters.

Video matters.

Drone imagery matters.

Your first Rightmove image matters.

Pricing matters.

Your description matters.

Social media matters.

The way the location is presented matters.

The speed with which enquiries are followed up matters.

Negotiation matters.

At Lennon James, our response to a more challenging market isn't:

do less.

It's:

market harder. Pricing Will Be Crucial Over the Next 12 Months

I've said this repeatedly because I believe it is probably the single biggest mistake sellers can make in the current market.

Don't confuse the highest valuation with the best advice.

Rightmove's latest analysis is very clear that realistic pricing remains one of the most important factors in achieving a successful sale.

If buyers have more choice and affordability is constrained, launching significantly above market value becomes increasingly risky.

You can always reduce the price.

But you cannot recreate the moment your home first launches.

That's why our approach at Lennon James is to combine realistic valuation with exceptional marketing.

The two have to work together.

So, Should You Sell Your House Now or Wait?

This is the question that ultimately matters.

And my answer isn't:

“Everybody should sell now.”

That would be ridiculous.

It depends on your circumstances.

But equally, I don't subscribe to:

“Wait until the market improves.”

Because what does that actually mean?

Wait until interest rates fall?

What if house prices rise while you're waiting?

Wait until oil prices fall?

What if another geopolitical problem replaces Iran?

Wait until inflation reaches 2%?

What if mortgage rates don't move with it?

Wait until after the Budget?

There will be another Budget.

Wait until political uncertainty disappears?

Good luck with that one.

Wait until there are no wars?

No economic concerns?

No elections?

No inflation?

No recession risk?

No tax uncertainty?

No market volatility?

You might be waiting a very long time.

In My Experience, the Perfect Time to Move Doesn't Exist

I've worked in property for most of my adult life.

I've seen:

The global financial crisis.

Recessions.

Brexit.

Political turmoil.

General elections.

COVID.

Lockdowns.

Stamp Duty changes.

Near zero interest rates.

Rapidly rising interest rates.

Inflation.

Energy crises.

War in Ukraine.

And now another major geopolitical shock in the Middle East.

At various points during every one of those events, there were compelling reasons not to move house.

And yet millions of people did.

Because people don't move purely because the Bank of England says conditions are perfect.

They move because:

They've had a baby.

Their children have left home.

They need another bedroom.

They need less space.

They've changed jobs.

They've retired.

They've separated.

They've got married.

They want a garden.

They want a different school.

They want to live closer to family.

They've inherited money.

They've found their dream house.

Or they're simply ready for something different.

Life creates the housing market.

And life doesn't wait for perfect economic conditions.

There Is Always a Property Market

This is perhaps the most important point I want homeowners to take from this article.

When people say:

“The property market is bad.”

I always want to ask:

For whom?

A slower market might be more difficult for somebody who needs to sell quickly at an ambitious price.

But it might be excellent for a buyer with no chain.

A market where your £500,000 house falls 5% sounds terrible.

But if the £800,000 house you're buying also falls 5%, yours has fallen £25,000 while the property you're buying has fallen £40,000.

You could actually be £15,000 better off on the gap.

That's why homeowners should think about the whole move, not simply the headline value of the property they're selling.

A Falling Market Can Create Opportunity

This sounds counterintuitive, but it matters enormously for people trading up.

Suppose your home is worth £400,000 and the home you want is £700,000.

Your gap is £300,000.

If both fall by 5%:

Your home becomes £380,000.

The onward property becomes £665,000.

Your gap becomes £285,000.

The market has “fallen”.

But your move has potentially become £15,000 cheaper.

Of course real properties don't all move by identical percentages.

But the principle demonstrates why obsessing over the sale price in isolation can be misleading.

The Same Applies When Prices Rise

If you're waiting for your £400,000 house to become worth £420,000, that sounds sensible.

But if the £700,000 property you want becomes £735,000 during the same period, you've gained £20,000 on yours and paid £35,000 more for theirs.

Your gap has increased by £15,000.

Again:

Think about the move, not just the sale.

This is something I discuss with Lennon James clients regularly.

What Should Sellers Do Over the Next 12 Months?

I would focus less on trying to predict the world and more on controlling the things you actually can.

You can't control Iran.

You can't control Vladimir Putin.

You can't control oil.

You can't control gilt yields.

You can't control the Bank of England.

You can't control the Budget.

But you can control:

when you move,

what you can afford,

which estate agent you choose,

how realistically your property is priced,

how well your home is presented,

how extensively it is marketed,

and

how you negotiate your onward purchase.

That's where I would put my energy.

What Would Make Me More Cautious?

If you're stretching yourself financially to the absolute limit, I'd be cautious.

If your move only works if mortgage rates fall significantly, I'd be cautious.

If you have little financial buffer, I'd be cautious.

If you're buying something you don't really want simply because you're worried prices might rise, I'd be cautious.

And if somebody is telling you to make a major financial decision based on a confident prediction about exactly what house prices or interest rates will do next year, I'd be cautious about that too.

Nobody knows.

Including me.

What Would Make Me Comfortable Moving?

If I wanted or needed to move.

If I could comfortably afford the mortgage at today's rates.

If I had sensible contingency.

If I had found the right home.

If I understood my local market.

If my existing property had been realistically valued.

And if the numbers worked for my family today.

I wouldn't personally put my life on hold waiting for an economic environment that may never arrive.

My View of the Next 12 Months

Do I think the next 12 months will be straightforward?

No.

I expect volatility.

I think energy prices remain a genuine risk.

Inflation could prove stubborn.

Mortgage rates may remain higher than many buyers hoped.

Government borrowing and gilt yields need watching.

The Autumn Budget could affect confidence.

Geopolitical events remain unpredictable.

Affordability will continue to constrain some buyers.

And sellers will have to compete harder for attention.

But do I think the Cambridgeshire property market will stop?

Absolutely not.

Homes will sell.

People will move.

Good properties will attract buyers.

Correctly priced properties will perform.

Poorly positioned properties will struggle.

And excellent marketing will matter.

Perhaps more than it has for quite some time.

There Is No Perfect Property Market

This is ultimately where I've landed after more than two decades around property.

Every market has something wrong with it.

When interest rates were incredibly low, house prices were rising rapidly and buyers struggled with competition.

When prices become softer, buyers worry they'll fall further.

When mortgage rates fall, more buyers enter the market and competition increases.

When there are fewer buyers, those who remain often have greater negotiating power.

There is always a reason to wait.

And there is always an opportunity for somebody prepared to move.

So my advice isn't to ignore what's happening in the world.

Quite the opposite.

Understand it.

Work out what it means for your finances.

Take good mortgage advice.

Understand your local property market.

Price realistically.

Choose an estate agent with a proper strategy.

And make the decision based on your circumstances, rather than waiting for somebody on television to announce that the perfect time to move has finally arrived.

Because after all my years working in property, I've never seen that announcement.

And I don't expect to.

The perfect time to move doesn't exist. The right time for you does.

Jon Brierley
Founder & Managing Director
Lennon James Property

Frequently Asked Questions About the UK Property Market in 2026 and 2027

Will UK house prices fall in 2026?

Rightmove's September 2026 forecast suggests average UK house prices could finish the year between broadly unchanged and around 2% lower. However, national averages disguise substantial regional and local differences. Rightmove

What will happen to the Cambridgeshire property market?

Nobody can predict it precisely. The latest official data showed average Cambridgeshire prices approximately 2.7% higher year-on-year in July 2026, while Huntingdonshire was approximately 3.1% higher. Future performance will depend on affordability, mortgage rates, employment, supply, buyer demand and the wider economy. GOV.UK

Will the Iran conflict affect UK house prices?

Not necessarily directly. The more important transmission mechanism is through energy prices, inflation, financial markets and borrowing costs. The Bank of England has explicitly identified the Middle East conflict and higher energy prices as important risks to UK inflation and interest rates. Bank of England

Will mortgage rates fall in 2027?

They could, but it cannot be known with certainty. Inflation, Bank Rate expectations, swap markets, energy prices, government bond yields and lender competition can all influence mortgage pricing.

Could the Bank of England increase interest rates again?

Yes. Bank Rate is currently 3.75%, and three MPC members voted for a rise to 4% in September. The Bank has said persistent energy-driven inflation could make tighter monetary policy necessary. Bank of England

Why do gilt yields affect mortgages?

Mortgage pricing is not determined directly by gilt yields, but government bond markets, interest-rate expectations and swap markets are interconnected. Sharp increases in market borrowing costs can contribute to tighter financial conditions and influence lenders' funding and pricing decisions.

Is now a good time to sell a house in Cambridgeshire?

That depends on the property and the seller's circumstances. There are active buyers, but they currently have significant choice. Realistic pricing, presentation and marketing therefore matter enormously.

Should I wait until 2027 to move house?

There isn't a universal answer. If you need or want to move, can comfortably afford to do so at today's costs and have found the right property, waiting solely for a prediction about future house prices or interest rates carries its own risks.

Is a falling property market bad if I'm moving up the ladder?

Not necessarily. If the value of the more expensive property you want falls by more in cash terms than your existing property, the financial gap between the two can actually narrow.

Will there always be a housing market?

People move for reasons far beyond economics — family, work, schooling, relationships, retirement and lifestyle. Transaction levels and prices change, but there continues to be a market through different economic cycles.