In the early months of 2026, the housing market in Wales is showing encouraging signs of recovery and activity, with more buyers and renewed confidence after a difficult period for the property sector.
According to the latest Royal Institution of Chartered Surveyors (RICS) survey in Wales, a net balance of surveyors expect more sales and some price growth in the first quarter of the year, suggesting that buyer interest is increasing after a relatively quiet end to 2025.
The positive outlook from estate agents, property managers and surveyors points to a busier year ahead for Welsh housing, driven partly by improved borrowing conditions and rising enquiries from new buyers.
One of the key factors shaping the housing market in 2026 is the current level of mortgage rates, which affects affordability and borrowing decisions. The Bank of England’s base rate has been held at 3.75%, influencing the interest rates lenders offer on home loans.
Average fixed-rate deals for buyers now broadly sit in the 4% to 5% range, depending on the term and loan-to-value, which is lower than the double-digit rates seen in previous years. These relatively competitive rates mean that many new buyers — including first-time buyers — are able to secure mortgages at more manageable costs, helping to sustain demand.
This improvement in mortgage affordability has encouraged a record share of first-time buyers to enter the market, with recent data showing that many are securing deals below 5% and taking larger loans relative to their deposits.
This shift not only supports sales activity but also underpins a more stable outlook for house prices across Wales and the wider UK. As buyers feel more confident about financing their purchases, sellers have responded by listing properties, which increases choice and activity in the market.
Alongside traditional mortgage finance, a rapidly growing bridging loan industry is playing an increasingly visible role in the property market, particularly for developers and investors looking for finance to refurbish properties.
Bridging loans are short-term credit facilities that can be arranged much faster than standard mortgages, often completing in around 43 days — the shortest average turnaround seen in nearly a decade. In 2025, the bridging sector recorded around £811 million in completed loans, with many used to fund investment purchases and property renovations.
Industry data suggests that the bridging loan book is expanding strongly, and forecasts indicate that the total market could exceed £12 billion in value as demand grows for fast, flexible finance in 2026.
These loans typically carry higher monthly costs than traditional mortgages, but their appeal to property professionals lies in speed and flexibility, especially when standard lenders are slow or hesitant. The growth reflects a broader shift in how developers and serious investors approach finance, using bridging as a way to secure opportunities that might otherwise be missed in a crowded market.
The combination of more accessible mortgage rates and a vibrant bridging market has given buyers and investors different pathways to participate in the property sector. For many homebuyers, stable mortgage deals at competitive rates provide long-term financing that supports ownership. For developers, investors and portfolio builders, bridging loans offer short-term capital that can unlock renovation projects, development sites or quick purchases at auction. Together, these financing options help sustain the overall activity in the housing market.
In Wales, this mix of funding is reflected in the positive sentiment reported by property professionals.
Many believe that improved borrowing conditions, clearer economic policy and rising confidence among buyers will translate into higher transaction volumes and a healthier market in 2026. Despite broader economic uncertainties, including cost pressures and supply shortages, the early signals from surveys and industry data point to a market that is ready to build momentum.
Overall, the start of 2026 looks promising for Welsh housing, with more buyers entering the market supported by favourable mortgage rates and growing confidence.
At the same time, the bridging loan industry continues to offer a valuable source of finance for property development and investment, helping to maintain activity and innovation in the sector. The combination of traditional and alternative finance is shaping a more dynamic housing landscape, where borrowers can choose the finance route that best suits their needs.
