You may be wondering whether 2026 is the perfect time to get into the UK housing market. Recent information of UK Finance shows gross mortgage lending rising by up to 4%, which will reach £300 billion in 2026, even though property transactions fall from 10,000 units and drop to 1.2 million. The increase is mainly due to refinancing, with 1.8 million fixed rate deals coming to an end with no requirement for changing. Home purchase loans are rising only 2 percent to £180 billion in the face of low affordability, which means your monthly payments consume more of your earnings.
Transfers of goods and services increase at 2% in the region of PS261 billion, ensuring things remain stable for homeowners who are already in the same situation as you. The amount of arrears decreases by 5%, to 87,500 when rates fall little, while possessions climb up to 9,400, which is lower than the average. James Tatch from UK Finance noting the strong growth in purchases for 2025 but cautions that affordability can limit your options, despite the changes to lending. If you’re considering a remortgage it could save you money; however, buyers they face challenges due to the wage and home prices not aligning in a perfect way.
Mortgage Lending to Rise 4% in 2026
You can see the rise in lending because refinancing is the main driver. With external remortgaging rising 10 percent and up to £77 billion, you’ll be able to secure better rates when your fixed deal expires. There is no requirement to sell. Transfers of products, in which you remain in the same place and switch internal products, reach PS261 billion, which is up by 2percent. Home purchases are growing modestly at 2%, compared to 2025’s surge of 22% due to stamped duty rushes. The affordability squeezes you more due to the high cost of payments against your income, despite changes to the lending rule. Buy-to-let remains steady with PS11 billion when it comes to new purchase because of tax and regulation.
UK Finance points to robust underwriting that keeps risks at bay. Arrears dropped by in 2012 by 12% at 92,100 and will rise to 87,500 by the end of next year. Payments become much easier as pressures lessen. Possessions grew post-pandemic but remain low at 9,400.
Mortgage Lending to Rise 4% in 2026 Snapshot
| Category | 2025 Figures | 2026 Forecast |
| Gross Lending | £289 billion | £300 billion (+4 percent) |
| House Purchases | £176 billion | £180 billion (+2 percent) |
| Remortgaging | £71 billion | £77 billion (+10 percent) |
| Property Transactions | 1.21 million | 1.20 million (-1 1.20 million (-1.6%) |
| Product Transfers | £256 billion | £261 billion (+2 percent) |
| Arrears Cases | 92,100 | 87,500 (-5%) |
| Possessions | 8,600 | 9,400 (+9%) |
| Official Website | https://www.gov.uk/ | |
What This Means for You
If you’re an owner and have an agreement that is ending 2026, you’ll be rewarded big time. The growth in mortgages means you have greater options and possibly less expensive payments that could save you thousands of dollars each year. Make sure to contact your lender early, they can provide specific assistance if you are they are stretched. Buyers like you have less transactions due to the fact that the prices haven’t increased enough against wage inflation. Make more savings for a larger savings or to invest in the shared ownership. Sellers, get your listings up when rates drop further. Inventory could increase gradually.
Rates are hovering around 4-5% on average, according to broad outlooks, and are easing off from highs but not going into a crash. Your budget is stretched further with refis than it does on buying. For first-time buyers, you should build credit and look into programs offered by the government. Investors BTL stagnates, be cautious about buying new items.
What You Can Do
Start today. Check your credit report for annually for free. Utilize online calculators to calculate payment rates at 4.5 percent rates. Speak to brokers about remortgage deals and compare fixed rates vs. trackers. If you’re buying, search for regions that have wage growth similar to the ones you live in. Track Bank of England cuts–they push mortgage rates down. Create emergency funds that cover 3 to 6 months of payment.
Advisors on the network; many offer chats for free. Viewings of time for spring, when activity is picking up. If the arrears are threatening, get in touch with lenders as soon as possible. Options are plentiful.
You’re at an intersection in the 2026 mortgage market: lending up 4percent can win you remortgage and fewer deals, however, less offers mean an ideal time to purchase. Take action based on your circumstances: refi for savings, and save fervently in the event of buying. UK Finance data shows stability even amid adversity; your actions now determine your future home plans. Keep up-to-date, chat with experts and make sure you have a place
FAQ’s
Will mortgage rates drop much in 2026?
Expect gentle easing, but not massive cuts. Fixed rates between 4 % are likely, which will help refis more than buying.
Should I remortgage now or wait?
If your deal ends soon, shop around-10% growth means competition. Lock early to avoid the hikes.
Is buying a home harder next year?
Yes, but with less transactions and an affordable. Boost deposit, check schemes.
