The Intermediary Mortgage Lenders Association (IMLA) expects UK mortgage and housing market activity to grow through 2026 and 2027, supported by lower interest rates, improving affordability, and eased lending regulations.
In its latest report, The New ‘Normal’ – Prospects for 2026 and 2027, IMLA forecasts gross mortgage lending will rise to £320bn in 2026 and £350bn in 2027, up from an estimated £288bn in 2025.
Residential property purchase lending is projected to drive most of this growth, reaching £205bn in 2026 and £225bn in 2027. Remortgaging is also expected to increase, rising to £103bn in 2026 and £110bn in 2027 as falling rates improve affordability.
The buy-to-let market is set to recover further, with gross lending forecast to rise from £39bn in 2025 to £44bn in 2026 and £48bn in 2027. Buy-to-let house purchase lending is projected at £12bn in 2026 and £14bn in 2027, supported by rising rental yields and market churn following the Renters’ Rights Act. IMLA notes that some amateur landlords may exit the market, often replaced by professional operators.
Property prices are expected to increase by 3% in 2026 and 3.1% in 2027, while transactions are forecast to reach 1.25 million and 1.32 million, respectively. Mortgage arrears are projected to continue declining, reflecting improved affordability and the completion of previous mortgage repricing.
IMLA predicts that intermediaries will continue to play a central role in mortgage distribution, with around 87% of regulated lending expected to go through brokers across 2026 and 2027.
Kate Davies, executive director of IMLA, said: “The housing and mortgage markets continue to play a vital role in supporting the wider UK economy, and our forecasts show that they are set to remain a source of resilience and growth through 2026 and 2027. Falling interest rates, rising transaction levels and a recovering buy-to-let market all point to a more positive outlook for lending activity.
“As the market grows and becomes more complex, the importance of intermediary advice is greater than ever. Intermediaries play a crucial role in helping borrowers and landlords navigate affordability, regulation and product choice, while supporting good outcomes across both the owner-occupied and buy-to-let sectors.”