LONDON — Britain's housing market is facing renewed pressure as economists downgrade forecasts for house price growth amid concerns over higher mortgage costs and affordability challenges.

Industry analysts say rising borrowing costs and persistent inflation pressures are making it harder for first-time buyers to enter the property market. New forecasts suggest house price growth in 2026 could be weaker than previously expected, while rental costs continue to climb across many parts of the country.

Experts warn that affordability remains one of the biggest challenges facing households, with elevated mortgage rates and large deposit requirements limiting purchasing power. At the same time, demand for rental properties continues to outpace supply, adding further pressure on tenants.

The latest outlook has intensified debate over housing policy, interest rates and support for first-time buyers as the government seeks to boost economic growth while tackling the UK's housing shortage.

Property analysts say the coming months will be crucial in determining whether market conditions stabilise or whether affordability pressures continue to weigh on both buyers and renters.