Possible tax rises in the Budget on 26th November risk further restraining housing activity next year. What’s more, our new forecast for 10-year gilt yields to fall from 4.71% now to 4.25% next year (3.75% previously) suggests mortgage rates may provide a smaller boost to house prices in 2026. But if this were to mean more would-be buyers stay on the sidelines, rental demand could be stronger than otherwise. So, while the risks to our forecast for house prices to rise by 5.0% y/y in Q4 2026 lie to the downside, the risks to our 2026 rents growth forecast of around 3.5% are skewed to the upside.
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