Without being too flippant, the housing market in 2025 can be summed up as being a bit ‘meh’.

House prices increased modestly, mortgage rates eased slightly, but demand remained weak. Despite the government resurrecting housing targets and promising to build 1.5 million homes over the next five years, the delivery of new homes was down in the first half of 2025 compared to the same period in the previous year.

Yet, there were noteworthy moments in 2025. The introduction of Awaab’s Law in October brought long-overdue protections for residents in socially rented homes.

The Future Homes Standard was another significant area of focus in 2025. As a key part of the government’s strategy to achieve net zero, this legislation should also reduce utility bills for households, who will ultimately benefit from more energy-efficient homes.

We also saw the government reviewing residential property transactions in the UK with a commitment to improve conversion rates.

And let’s not forget the government’s announcement of a £39 billion investment in the next Affordable Homes Programme. This investment represents a 50% increase on the previous amount earmarked for affordable homes and is widely seen as a cornerstone of the government’s ambition for growth across the entire economy.

So, if 2025 was about laying the groundwork for delivering high-quality, energy-efficient homes at scale, is 2026 destined to be the year we ‘build, baby, build’?

Well, unfortunately, that may not be the case.

While supply-side reforms and stronger consumer protections are welcome, we still face fundamental challenges around demand, and these have not been widely discussed.

Whether it’s Zoopla, Rightmove, or RICS, all data points to a softening in demand outside London, and something akin to a crisis within London itself.

With no sign of demand increasing, 2026 may well become the year of the buying scheme. If house price inflation remains stable, we could see the reintroduction of Help to Buy. This scheme reduced barriers for buyers, gave housebuilders the confidence to build, and generated revenue for the Treasury. Bringing back Help to Buy in some form seems the most straightforward and cost-effective way to address the demand challenge.

But what about the second-hand market? Help to Buy has only ever applied to new homes, and with new builds accounting for just around 7% of all property transactions in the UK, could we see the introduction of a scheme for second-hand properties?

Talk of reintroducing DIY Shared Ownership demonstrates a growing appetite for creative solutions to increase the supply of affordable homes. For buyers, DIY Shared Ownership offers greater choice, helps avoid the new homes premium—which can sometimes exceed 20%—and sidesteps estate management fees that often come with new builds. The scheme also makes commercial sense for registered providers, as acquiring good-quality second-hand homes removes development risk and allows them to focus on their primary landlord services.

With the next Affordable Homes Programme (now known as the Social and Affordable Homes Programme) launching in 2026, further reform of shared ownership is needed to ensure the scheme remains relevant for today’s first-time buyers and eligible purchasers. Reviewing income caps should be the first step. I would advocate for removing income caps altogether and instead introducing a maximum purchase price cap, set regionally to reflect local market conditions. This would help not only those on lower incomes to get onto the property ladder, but also buyers with higher incomes but who are still struggling to purchase a home, perhaps due to lack of deposit.

Alongside changes to buyer eligibility, we should also reform how service charges are passed on to shared owners, especially those living in high-rise apartment blocks. A new, less burdensome formula for collecting service charges is needed to keep the scheme true to its core purpose: making home ownership genuinely affordable. Additionally, regulation of the managing agent industry is essential so that all customers—whether shared owners or not—can be confident their agent is acting in their best interests.

Finally, 2026 will see the rollout and enforcement of the Renters Reform Bill. This bill ends no-fault evictions and introduces tighter regulation on how rents can increase each year. Will this cause more smaller flats and houses to come onto the market as some landlords decide to sell rather than face additional regulation? If so, might this push rents higher as fewer properties become available to rent? My view is that we will not see a flood of ex-buy-to-let properties coming to market solely because of the Renters Reform Bill. However, any increase in taxation on landlords could well prompt more to sell up and exit the market.

In summary then, 2025 was about addressing the longer-term issues in the housing market then 2026 needs to be the year we begin to see those changes having a tangible impact on the market, be that consumer confidence to get out and buy and developer confidence to get on and build.

From a government perspective, if the target of 1.5 million homes is to be perceived as anything other than a pipe dream, then they need to act quickly and implement demand side reforms that will drive demand in the short and medium term. As we’ve already discussed, these need not be costly to the government. Changes to the eligibility criteria for shared ownership or broadening the scheme to second hand homes is cost neutral and spiralling house prices we saw after Covid proves the need to broaden shared ownership to those on higher incomes.