With the festivities behind us, mortgage professionals are already back at their desks fielding enquiries from hopeful borrowers. So what are their thoughts on the mortgage market for 2026?
Do intermediaries feel optimistic about what 2026 has in store, and what do they need from the government, lenders and the regulator to make this year a success for brokers and their borrowers?
We asked a group of mortgage professionals for their outlook for 2026.
Consumer confidence in 2026
Whether confidence will lift among movers and property investors this year divided opinion.
Michelle Niziol, chief executive of IMS Property Group, expects 2026 to be a “modestly stronger year”, but does not see a return to boom conditions.
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“If inflation continues easing and we see even gradual base rate reductions, confidence will lift materially, especially for movers and investors,” she says.
On the other hand, Richard Dana, founder and CEO of Tembo, feels that consumer confidence is still fragile and wider economic sentiment will play a big role in how much pent-up demand actually turns into completed purchases.
“Even when the fundamentals look good on paper, big financial decisions can stall if people feel unsure about job security, inflation, or the direction of interest rates,” he adds.
First-time buyers
Dana says 2026 will be a good year for first-time buyers, with demand from this group of buyers “genuinely strong”.
“Rents remain high and, for many people, owning is starting to look more attainable than it did during the rate peaks of the last couple of years,” he says.
Mortgage affordability has improved throughout 2025 due to lower rates and more flexible lending, while competitive pricing continued into December. And in the final throws, the Bank of England cut the base rate from 4% to 3.75% – more good news for first-time buyers.
In its December webinar, Skipton Building Society also noted strong demand from first-time buyers, particularly sole borrowers, who see homeownership as a much more achievable goal going into 2026.
Matthew Leggett, senior mortgage and protection adviser – team lead at Mortgage Scout, does think, however, that first-time buyers still need greater assistance to get on the housing ladder.
He says: “Since Help to Buy ended, there has been no replacement. A modern, fit-for-purpose scheme that supports both new builds and existing homes would make a major difference.”
Will 2026 be a better year?
Nick Jones, mortgage sales and marketing director at Access FS, is optimistic that it will be.
“Forecasts point to rising property transactions driven by easing inflation and continued base rate reductions.
“My worry is more landlords pull back from buy to let or leave the market altogether. Almost 100,000 landlords left the market in 2025 alone. We don’t want more stock being dumped on the market,” he says.
Richard Sexton, commercial director of proptech Houzecheck, thinks the market’s fortunes are tied to inflation. If it continues to ease – with it currently resting at 3.2% – then we’re likely to see further cautious cuts to the base rate.
“This will bring a much-needed shot in the arm to a market that has felt quite lethargic lately. That could turn 2026 into… a more benign market than 2025,” he adds.
Tom Davies, group financial services managing director at Mortgage Scout, which is part of LRG, says he is expecting interest rates to move towards the mid-3% range over the course of 2026, which will continue to support confidence – particularly once borrowing costs sit consistently below the 4% threshold. This, he adds, is typically the point at which buyers begin to feel comfortable with moving again.
“As rents continue to rise and mortgage costs ease, more people will reach a point where owning is not only achievable but cheaper than renting. When that balance shifts, decision-making becomes clearer, and activity follows.
“We are not expecting a boom, but momentum will no doubt build from early this year,” he notes.
What we need from lenders, the regulator and government this year
Brokers want to see consistency from regulation.
“The industry performs best when rules are stable and clearly communicated rather than constantly shifting,” says Niziol.
Last month, the Financial Conduct Authority (FCA) laid out its roadmap for mortgage market reform. In the first half of 2026, it plans to consult on loan-to-income (LTI) limits, responsible lending rules and affordability for retirement mortgages. Feedback and policy statements are due in the latter half of the year.
From the government, Niziol wants to see more housing supply and genuine support for working families and small business owners, particularly around taxation, childcare costs, and support for first-time buyers.
She adds: “If we want a healthy mortgage market, we need a functioning housing ecosystem around it.”
Sarah Tucker, founder and CEO of The Mortgage Mum, wants to see greater collaboration among stakeholders in the home buying journey, saying: “Our industry must work together to give the consumer an elevated homeownership journey. From education prior to needing a mortgage, to AI powered services to improve efficiency, to a better process at government level. We need to work together now.”
The government’s consultation on reforming the home buying process closed on 29 December.
Leggett, meanwhile, says continued innovation from lenders is essential.
Smaller lenders have become more competitive on affordability using track record-based assessments and long-term fixed rates, while big strides have been made in the foreign national mortgage market.
Leggett adds: “Building on that momentum in 2026 would support a more flexible and dynamic market.”
Read Mortgage Solutions‘: The lowdown on foreign national mortgages: from challenges to competitive advantage.
