Propertymark has issued a warning that the housing market risks being held back by property taxes.

The market has many of the ingredients needed to flourish, but government tax policies are getting in the way, the trade body says.

Forecasts of modest house price growth in 2026, alongside falling mortgage rates, point towards a housing market that is beginning to stabilise, offering renewed hope for first-time buyers, it says.

And this shift is helping to rebuild confidence, particularly for those who have been priced out of the market in recent years.

Barriers

However, Propertymark warns that wider affordability challenges remain, and lower mortgage rates alone will not solve the barriers facing first-time buyers.

High house prices, rental costs that limit the ability to save, deposit requirements, and the pace of homebuilding continue to be problems.

In 2021, the number of properties exchanged stood at just over a million (1,073,308), compared to 920,052 in 2025. This 14.3% drop over four years demonstrates that market constraints remain, Propertymark says.

Catalyst

Temporary thresholds during and immediately after the Covid Pandemic reduced tax bills for a wider range of buyers.

Propertymark stresses that these examples clearly show how property tax holidays or more favourable bands and thresholds, can act as a catalyst.

Property tax thresholds have failed to keep pace with rising house prices and wage growth over the past decade.”

Nathan Emerson, CEO at Propertymark (main picture), says: “Lower mortgage rates are a positive step, and will undoubtedly help many first-time buyers reassess their options.

“Combined with modest house price growth, this shows the market is finding a more sustainable footing,” he says.

“However, affordability pressures remain complex, and property tax thresholds have failed to keep pace with rising house prices and wage growth over the past decade, increasing the tax burden on buyers.”

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