While the recovery in housing demand and prices after the drag from the rise in stamp duty charges on 1st April is underway, weak employment and still high mortgage rate mean house prices will probably rise by only 2.0% in the year to Q4 2025. But our view that Bank Rate will fall from 4.00% now to 3.00% next year, rather than to the low of 3.50% priced into the financial markets, implies a bigger decline in mortgage rates will allow prices in the year to Q4 to rise by an above-consensus 5.0% in 2026 and by 3.5% in 2027.