If life is like a box of chocolates, as Forrest Gump famously claimed, then residential property this year has been a particularly mixed assortment – some delicious, some nutty and a few best left untouched.

It has not been an easy year for the residential property market. That said, I struggle to share the media’s enthusiasm for declaring a cataclysmic collapse in values.

In reality, the low to middle-market have behaved with surprising decorum. The top end, admittedly, has been less cheerful since the Government decided to give the non-dom regime a good kicking — with all the finesse one might expect.

rats in a sack

Our perennial challenge, regardless of price bracket, remains persuading vendors to quote an asking price within touching distance (say, 5%) of genuine, bankable market value. This is not helped by rival agents who, like ‘rats in a sack’, compete fiercely in a flattering Olympics, promising sellers prices that have little to do with reality and even less to do with achieving a sale.

They know perfectly well that such prices may lead to years of inertia, but serving their own interests by gaining the instruction seems to be the overriding priority. Market sense, sadly, does not always get a seat at the table.

Buyers vote not with words but with their feet.”

Unsurprisingly, these expectations are eventually crushed by the market, where buyers vote not with words but with their feet. We still see properties that have been ‘for sale’ for four or five years — monuments to optimism — waiting patiently for their owners to wake up and smell the coffee.

The months preceding this year’s Budget were marked by a collective intake of breath. Mansion Tax, Exit Tax, higher Capital Gains and Inheritance Tax were whispered with the reverence normally reserved for horror films, but were thankfully absent. When people are frightened, they do what they do best: absolutely nothing and transactions duly dried up.

The mid-market continues to tick along sensibly.”

Where underlying value has been respected, the mid-market continues to tick along sensibly, with sales completing within a few percentage points of realistic guide prices. Boring perhaps — but welcome in challenging times.

Even so, I do not believe mid-range values are down by more than 5–10% from the halcyon days of two years ago. In a few isolated cases, we have achieved prices that history itself might struggle to improve upon.

Helpfully, interest rates are now heading south following the Bank of England’s latest revision. Five-year fixed rates are in the low 4% range, with some flirting with 3.7–3.8%. Even 25-year mortgages are available at around 4.19% — almost nostalgic when one recalls the 6.6% peak of 2023.

In the £1–3 million bracket, values have softened by a similar 5–10%, but 2026 looks likely to be steadier rather than spectacular.

The real headache lies above £10 million.”

The real headache lies above £10 million. Thanks to non-dom reforms over the past 18 months, the UK has experienced one of the world’s largest wealth exoduses — second only to China.

London, however, retains its magnetic pull. Not all wealthy families have fled, and buyers from the US, Eastern Europe and the Middle East still appear, seeking landmark homes — though in thinner numbers. Despite this, we are not drowning in supply. Turnkey houses remain scarce, and values across north-west London are down by around 10%, but not dramatically more.

fantasy pricing

Reports of sales at One Hyde Park achieving 50% of the asking price say more about the collapse of fantasy pricing than true value. Likewise, 2–8 Rutland Gate was exuberantly overbought in 2020; achieving 75% of that figure today would be optimistic.

We are also seeing more empty-nesters selling large family homes and opting for long-term lateral rentals instead — unconcerned about missing out on runaway capital growth.

The rental market between £500 and £1,500 per week has strengthened by around 10% as buy-to-let landlords exit ahead of Renters’ Rights reforms. At the very top end, rentals have been busy, with recent lettings approaching £40,000 per week.

Steady 2026

In conclusion, 2026 looks likely to be a year of ‘steady as she goes’. In property, as in life, those who keep their sense of humour usually fare best.