Mortgage market update | January 2026

Happy New Year! I hope you had a great break. I am honestly glad to be back into some sort of routine. As much as I enjoyed the time off, surviving on a diet of chocolate, cheese, biscuits and crisps for two weeks was starting to get a little too much!

It has been a busy start to the year and I am already right back in the thick of it. It is great to see so many clients reaching out already to plan their moves for 2026. While the New Year always brings that fresh wave of interest, I am genuinely hoping this year brings a bit more positivity and some lower rates as things start to settle down.

HSBC and Leeds set the pace

We have not seen a flood of changes yet, but HSBC and Leeds Building Society both made some reductions to kick off the year. HSBC has trimmed rates across its residential and buy-to-let ranges, while Leeds reduced rates on several different products.

I think we will see rates coming down further. When the big lenders start moving at the beginning of the month, we can usually expect others to follow in the coming weeks as they look to stay competitive.

The 2026 Remortgage Wave

Numbers from UK Finance show that around 1.8 million fixed-rate mortgages are due to expire over the course of 2026.

What this means for the market:

• Lender Competition: With so many people needing a new deal, lenders are likely to be much more competitive to win that business.

• Planning: Many of these mortgages were originally fixed in 2021 when rates were at historic lows. Because the market has changed since then, we are seeing people start their research a bit earlier than they used to.

• Market Stability: Even with so many deals ending, the market is on much steadier ground than it was a year ago, with rates generally drifting downwards.

  
  

If you are one of these 1.8 million people, please do not worry. We already have your details and will be in touch well before your current deal expires to help you look at the options. But with rates starting to trend downwards, it is a good time to keep an eye on things.

House Price Growth: What the experts are saying

Most of the major lenders and estate agents have now released their forecasts for the year ahead. Nationwide and Halifax are both predicting modest growth, with estimates sitting between 1% and 4% for 2026. Rightmove and Savills are slightly more specific, currently forecasting around 2% growth across the UK.

A few things to keep in mind with these numbers:

• Regional differences: While the national average is modest, areas like the North of England, Scotland, and Wales are expected to perform more strongly than London and the South East due to better affordability.

• Asking vs. Achieved: It is important to remember that these forecasts often look at "asking prices". Realistic pricing is still the key to getting a deal over the line in the current market.

• The Spring Reset: It is worth noting that these early January predictions are almost always reset after a few months. Once the "spring bounce" happens and we see the actual volume of activity, agents often recalibrate these figures to reflect how the market is really performing.

New flexibility for First-Time Buyers and Self-Employed

The Financial Conduct Authority (FCA), has outlined a new "roadmap" for 2026 aimed at modernising mortgage rules. The goal is to make it easier for people with "non-standard" incomes, such as the self-employed, contractors, and those in the gig economy, to access the market.

What is being proposed:

• Modern Affordability: The FCA wants to move away from "blunt" affordability rules toward assessments that better reflect real-world working patterns and variable income flows.

• Deposit and LTI Support: They are reviewing loan-to-income (LTI) ratio requirements, which could give lenders more flexibility to support buyers with smaller deposits.

• Rental History: There is a specific push to ensure that a track record of consistent rental payments is more widely considered as evidence of mortgage affordability.

• Flexible Payments: The regulator is even exploring "alternative payment schedules" that would allow self-employed people to pay their mortgage in a way that matches their irregular income.

Consultations on these changes start early this year, with the first of the new rules expected to be in place later in 2026.

Risk warnings

Your home may be repossessed if you do not keep up repayments on your mortgage