Stevenage House Price Crash in 2026?
In early 2023, property forecasters predicted a significant UK housing downturn over the next two years, citing rising interest rates following Liz Truss's departure. Halifax expected an 8% drop, Savills predicted a 10% drop, and Nomura Bank forecast up to a 15% drop.
While these gloomy forecasts successfully grabbed headlines and generated clicks, the actual market data three years later tells a completely different story.
According to the Land Registry, the reality has been far more resilient. UK house prices are 3.93% higher today than they were in January 2023. Locally, the picture is also one of stability rather than collapse, with Stevenage house prices being only 2.81% lower than in January 2023.
Yet even with those statistics, now that we are starting 2026, I am again hearing the same nervous question being asked all over again. Newspaper reports on the run-up to Christmas 2025 stated that there were months when house prices were dropping and asking … with these drops, will 2026 be the year house prices crash?
Putting the Property Market Data in Context
Before we start, let us all agree that bad news sells newspapers.
So, looking at the data, the first thing to note is that over the last three years, house prices in Stevenage have experienced many ups and downs in the Stevenage Land Registry averages.
For example, in November 2023, annual house prices in Stevenage were falling at 8.6% per annum, yet by March 2025, they were rising at 2.5% per annum. The latest Land Registry stats show we are 1.1% higher than a year ago locally.
The point here is not to look at one month in isolation, but to examine the broader trend over the medium term, because statistics without context can be misleading.
The Leading Indicator That Predicts Growth
For a deeper look at what is actually happening, we can turn to Denton House Research. They uniquely track the £/sq.ft figures at the "sale agreed" date in the UK. This is a vital metric because the £/sq.ft figures track the Land Registry data five months in advance with a 98% correlation. I have done the calculation using the £/sq ft over the last 3 years. If you recall, I stated above that UK house prices had risen by 3.93% over the last 3 years; the £/sq.ft figures showed a 3.59% rise using the same method.
This means we effectively know what will happen to the published Land Registry house prices five months in advance with a very high level of certainty.
Five months ago, the average price per square foot for UK home sales was £341.85, and today it stands at £346.02. Therefore, based on this calculation, UK house prices should be 1.22% higher by July than they are today. None of these points leads to a crash. Quite the opposite, they point to a resilient underlying value.
Next, let me look at other metrics that signpost towards stability.
Confidence Returning to the UK and Stevenage Property Markets
When we look specifically at the total number of property sales in the Stevenage area, the narrative of a crash falls apart even further. For example, in the last six months of 2022 (July to December), 567 Stevenage homes were sold subject to contract. In the same period in 2025, that figure was 756. This increase is a clear sign of market confidence. Buyers are active, and deals are being done.
(Stevenage SG1/2).
Looking at this January’s data, the UK property market has hit the ground running in 2026. There is remarkable momentum across every key metric. 96,500 new UK homes have been listed year-to-date. This figure is already 0.5% ahead of 2025 and 17.5% up on 2024. It is also 34% higher than the pre-pandemic average. This increase in choice is being met with eager demand rather than oversupply. Gross sales are healthy at 62,700 UK homes sold subject to contract. That sits 23.5% higher than 2024 and 30.6% above pre-COVID norms. Net sales are accelerating with a strong week-on-week uplift. So far, we have seen 46,100 net sales, running 35% ahead of 2024 and 40% above the 2017–19 average. This signals a highly confident and active start to the year.
The Mortgage & Employment Landscape
Another key reason for the relative resilience of Stevenage house prices is the environment surrounding low mortgage rates. After climbing to over 6% in late 2022, rates have stabilised and are expected to continue to fall gradually through 2026. For example, a five-year (70% Loan-to-Value) fixed-rate mortgage is available at 3.72%, or a 5% deposit first-time buyer five-year fixed-rate mortgage at 4.53%. Further reductions are likely if the Bank of England continue to cut its base rate later in the year. This shift in affordability is expected to improve buyer sentiment and support price levels.
Also crucially, the UK labour market remains strong. Unemployment is low, currently sitting at around 5.1%, and wage growth is holding steady at 4.7% per year. Also, there is little sign of the kind of financial stress that forces mass sales or repossessions, which typically precede major house price crashes.
Why 2026 is Nothing Like 2008
Another critical factor that is often overlooked is the increasing regulation of mortgage lending over the past decade. Since the introduction of the Mortgage Market Review in 2014, borrowers have had to demonstrate that they can afford repayments at interest rates significantly higher than those they signed up to.
This stress testing was designed to create market resilience, and it has been incredibly effective. Even at the height of ultra-low rates of 2020/2021, when mortgages were typically between 1.5% and 2.5%, those new borrowers had to demonstrate that they could afford repayments of 6.5% or 7%. So now, even though rates have risen, most existing homeowners coming off those rates in 2026 are already equipped to manage the change. The reckless lending of the past is simply not present in today's market.
What About Those 20% House Price Drops in London?
Of course, there are significant variations across the UK.
Some small parts of Central London (Mayfair, Chelsea and Kensington etc.), which attracted foreign investment over the last 20 years, have experienced a significant drop in house prices over the last six months (some areas more than 20% in six months).
Over the last 20 years, these ‘posh’ London areas have seen huge explosion in their house prices, way over the London and national averages because of that investment. That increase didn’t affect the rest of the London or UK property market. Now we are seeing an equally significant drop in house prices in those areas, as many of those foreign property owners are divesting of their London property. So, when the papers report, as I am sure they will in the coming months, of house price drops in Central London, I hope you will remember this.
Could a House Price Crash Still Occur?
It is not impossible, but the necessary conditions are not present. To see a genuine crash, we would need a perfect storm. We would need a sharp rise in unemployment, a sudden spike in interest rates, a collapse in mortgage availability, and a wave of forced sales. We would need another global financial crash for that to happen.
The foundation of the UK housing market is far stronger than it was in 2008 or the late 1980s. There is no subprime mortgage crisis, no rampant overborrowing, and no glut of unsold new builds.
In conclusion, although the UK housing market in 2026 faces challenges, the data indicates a direction towards stability. A crash remains highly unlikely. Most regions are expected to experience slow but steady growth, with some pricier areas dipping slightly. Overall, the narrative for 2026 is one of cautious optimism.
Ignore sensational crash forecasts; rely on the data. For buyers or sellers in 2026, strong opportunities exist, especially for those who know their local market and keep a long-term perspective. This is a stable, normalising market, far from collapse.
These are my thoughts on the current market state. What are yours?