As we near the end of the year, it’s traditional for the weekend property supplements to run a piece on their predictions for the property market the following year. It is of course total speculation, peppered with research from the usual economists at the larger national Estate Agencies so we thought we might as well throw our twopence in as Estate Agents actually on the ground in the Surrey property market.
The 2025 property market
The market this year, contrary to the rumours, has not been too bad. It’s been our first year (9 months and counting) under our Burton Matthews brand and I’m not sure we’d have dared hope to have delivered the business we have thus far. An overnight success twenty five years in the making, as is so often the case! That said, looking at the behind the scenes data on Rightmove, it’s clear some agents won’t be feeling the same, but some will. Nationally the picture will vary and even locally, different market segments have performed quite differently to one another. Certainly it feels as if the UK Government Budget has cast its shadow over the market for much of the year, not entirely helped by ever wilder media speculation leading up to it. It’s now behind us and unsurprisingly the world still turns.
The ‘prime’ property sector
There are of course now additional costs looming at the top end of the market with the so called ‘mansion tax’, and that may help nudge a few owners in that sector into a downsize given the inflationary backdrop already experienced. We suspect that end of the market will be a little more subdued locally. That move is often quite elective rather than borne of necessity, so we’d expect some pricing sensitivity and patience required in that sector. That said, the fear of the budget this year has probably had more impact than the reality will have next year.
First time buys and Buy to let Investments
At the other end of the market, flats/apartments have proved a bit of a grind to secure buyers for. The buy to let market appears to have rather had its heyday and although it still provides a steady income for those landlords with little financing costs to cover, more highly leveraged landlords who have had tenancy costs loaded onto them, ever increasing regulatory burdens, negligible capital growth for flats and hugely increased borrowing costs will be weighing up whether it’s worth hanging on in there or just selling up, so this will likely see muted buyer appetite and increased supply. We suspect this will see further upward pressure on rental prices however, contrary to government intention.
The other pressure will be increasing supply of new build apartments locally, and nationally no doubt, as local authorities scramble to hit housing targets imposed by successive governments. If the goal is to hit unit numbers, then higher density housing will continue to find favour at the planning office, irrespective of buyer demand. We’ve certainly seen more schemes locally in which the local authority have encouraged the developer to squeeze flats into their scheme to get planning. When we’re carrying out valuations at this end of the market, our research shows more often than not that the prices haven’t really moved much in the past decade. This has at least given first time buyers an easier market to tackle, not withstanding the already high values and borrowing costs in the South East.
The ‘middle’ market
By contrast, the “middle” of the market, if that’s not too vague a term, has seen steady churn and we predict will continue to do so. Moves of necessity driven by growing families, schooling, commuting links, multi generational living and so on. This is the sector of the market that as Surrey Estate Agents we predominantly operate in, and have already enjoyed much of our success in. We think 2026 will be more of the same in this bracket. Buyers are astute to property values and are in an unprecedented position historically in terms of market data and evidence to be able to analyse this. The casualties we saw this year in terms of houses that didn’t sell at all or suffered a few price cuts before finding a buyer almost unanimously looked badly advised from the off, not as a consequence of downward pressure on the market generally. The majority of sales we’ve handled secured buyers within a couple of weeks and within a couple of per cent of the asking price. Key to that success is being able to demonstrate, with evidence, what those properties offer in relation to the competition and thus why that price is being asked.
2026 activity and prices
We suspect inflationary pressures on the cost of living will see negligible price growth over the next year, maybe 1 or 2 %, but hope to see that inflation continue to trend downward and consequently see further interest rate cuts. I don’t think anyone will be predicting a return to the halcyon days of 1% mortgage borrowing, but we hope to see some products nearer the 3.5% mark at some point in the year. Not enough to make anyone delay their decision to move, but at least with the direction of travel more favourable than 2022 into 2023. There will no doubt continue to be global political concerns that have a bearing on our economy, but when are there not? The general public seem pretty hardened to that noise and are far more focussed on their more immediate family life and that with which they have some control over, particularly in that middle market sector. We have seen a trend of buyers looking for homes that are more future proofed in terms of being able to grow their property along with their families or their families needs. As a nation we’re moving less than we did, and transaction levels are still 19% down on pre 2008 levels before the last financial crisis. We anticipate homes with that ability to evolve and expand longer term will perform best of all.
Conclusion
We expect 2026 to be a “slow-and-steady” year for the housing market in London and South East England: modest price growth overall, better opportunities in outer and commuter-belt areas, strong rental demand, and significant divergence between sub-markets.
Anyone looking to buy or invest should be selective — focusing on affordability, long-term demand (jobs, transport links, schools), and rental yield potential — rather than expecting a big short-term boom.
If you’re thinking of moving next year and would like some honest, professional advice, backed by decades of experience in the Surrey property market, do give us a call.
