Fast forward fifty years. Half of England and all of Wales is officially experiencing a drought. And in the borders of Scotland, gritters have been used to spread sand over the main roads to reflect the heat and cool the surface of the highway.

Borrowing Rates

From an economic and housing market perspective, there are also some parallels, though a little less obvious.

In 1976, the Bank base rate started the year at 11% and ended at 14.25%. By contrast in 2026, they started the year at 3.75% and last week the MPC voted 6-3 to hold them there.

However, fixed-rate mortgage costs have recently been increased to reflect heightened inflationary risks, given the resumption of hostilities in the Middle East.

A 2-year fixed-rate mortgage has now risen to 5.04% (at a 75% loan to value with the Nationwide), unless you are prepared to pay an upfront fee. At the beginning of the year, you would have been quoted 4.01%.

Those who have a lower rate mortgage offer are, once again, keen to lock into it. Those looking at securing an offer are re-doing their maths.

Market Activity

In 1976 there were 1.34 million housing transactions across the UK.

Data released last week by HMRC tells us that there had been just under 1.2 million in the year to June 2026. That is very close to the post-GFC norm. 

But it hides the fact that the Bank of England has now reported two months of weak mortgage approvals, 58,200 in June on a seasonally adjusted basis. That compares to a more normal 65,200 back in April.

Market demand remains focussed on needs-based buyers.

Price Movements

In 1976 average UK house prices rose by 8.1% in nominal terms. By contrast, at the end of July this year, nominal annual house price growth stood at a much lower 1.8% according to the Nationwide Index.

But if you adjust those prices for the underlying level of inflation, both were falling in real terms - even if that underlying rate of inflation was very different (15% then compared to 2.6% now).

Tax and Regulation

The similarities do not entirely end there, with one Labour prime minister passing on the baton to another in both years.

Speculation about what tax and regulatory policies the new Prime Minister may adopt has been rife. 

From a housing market perspective, he has publicly ruled out a potentially disruptive reform of property taxation during this parliamentary term. You can read about that here if you are a Times subscriber and here if you are an FT subscriber

More clarity on other tax issues will be provided at the next budget which we now know will take place on 28^th October

Meanwhile, the re-appointed Secretary of State for Housing Communities and Local Government, Angela Rayner, has also ruled out the introduction of rent controls south of the border.

This comes at a time when rental growth has returned to low single digit territory and landlords are adjusting to life under the Renters’ Rights Act. You can read more about how each of these is impacting the top end of the lettings market in our latest prime rental spotlight.

Articles from across Savills 

Prime housing markets remain price sensitive as caution returns

Prime housing markets tend to like certainty – but so far in 2026, this has been in short supply.

What the government’s housing roadmap means for buyers and sellers

In June the government published its roadmap for reforming how homes are bought and sold in England and Wales.

Prime residential rents – Q2 2026

As the prime rental market adjusts to the Renters' Rights Act, new trends are beginning to emerge.