State of the Market in 2026
State of the Market in 2026
We are back in the thick of the annual cycle, and 2026 feels rather different from the picture we described in our last look at the state of the market. Back in 2022, we were writing about a seller’s market finding its rhythm again after the disruption of the pandemic: buyers plentiful, multiples firm, and the main question for most principals was simply when to go. Four years on, the shape of the market has changed, and so, we’d argue, has the question actually worth asking.
As regular readers will know, ours is a seasonal market, and that much hasn’t changed. Activity tends to build through the spring as firms clear their year-end deadlines and principals turn their minds to what comes next; it holds through to the summer break, dips a little, then picks up again into the autumn and runs through to Christmas. What has changed is what’s driving the activity within that familiar pattern, and who’s setting the terms once a deal is on the table.
The consolidation story has moved on to a harder question
The headline story of the past few years has been private equity. By last autumn, something like a third of the UK’s top 60 accountancy firms were backed by private equity money in one form or another, and the roll-up model – buy a platform, bolt on smaller practices, sell the whole thing on again in three to five years – became the dominant narrative in trade press coverage of the profession. Grant Thornton took investment from Cinven; Cooper Parry grew on the back of Lee Equity; Citrin Cooperman found a backer in Blackstone. For a while, it looked like the only story worth telling.
Then, in February 2026, Xeinadin – one of the largest and most acquisitive of the consolidators, built from more than forty acquisitions since 2019 into well over a hundred UK and Ireland offices – paused the sale process its private equity backer Exponent had been running, after the auction failed to meet its billion-pound-plus asking price. Xeinadin’s chief executive was quick to push back on any suggestion the deal had “collapsed,” and by the summer the firm was talking about a £300 million revenue target and had gone on to complete more than twenty further acquisitions in the space of a year. But the episode was widely read across the trade press as a reality check for the sector: the multiples that had “skyrocketed” during 2024’s buying frenzy are correcting, and investors are asking harder questions about how well a consolidator has genuinely integrated what it has bought, rather than simply how much it has bought.
That’s worth sitting with if you’re weighing up a sale, whichever side of it you’re on. It doesn’t mean private equity has lost its appetite for the sector – far from it – but it does mean the money is chasing quality and demonstrable integration over raw scale. For a firm doing the buying, that discipline is worth having regardless of who’s funding you. For a firm being bought, it means the story you can tell about your own practice – how it actually runs day to day, who it depends on, how easily it would sit inside someone else’s systems and culture – now matters more than it might have done at the height of the 2024 frenzy.
What this means if you’re not chasing a nine-figure exit
Most of the practices we work with were never going to be candidates for a private equity roll-up, and that’s no bad thing. Xeinadin’s own leadership has said publicly that they see enough independent firms in the £3 million to £20 million range to keep them acquiring for years yet – and, tellingly, they’ve been shifting their focus away from retiring partners and towards firms with younger, growth-minded partners who want to keep building rather than step back. That’s very much the shift we flagged back in 2022, when we said the digitisation of practices and a growing appetite for younger, more tech-minded firms would start to reshape who gets the best terms. Four years on, that prediction has essentially landed.
The practical upshot for most of our clients: a profitable, well-run practice that doesn’t lean too heavily on one principal, and that isn’t dragging its feet on the two things we cover below, is still very much in demand – whether the eventual buyer turns out to be a consolidator, a firm looking to expand locally, or an individual buying into their first practice. The froth may be coming off the very top of the market, but the fundamentals for a smaller, well-prepared vendor haven’t gone anywhere.
There’s a supply side to this worth naming too. A good number of principals who held off selling during the pandemic years, or who quietly decided to wait until the market settled, are now the ones bringing firms to market – often later in their careers than they might once have planned. That’s kept a steady flow of decent, established practices coming through, which in turn gives buyers more genuine choice than they had in the tightest years of 2021 and 2022. Good news if you’re buying; a reason to be realistic about your own position, rather than assume scarcity will do the work for you, if you’re selling.
If you’re on the buying side and reading this looking for opportunity rather than an exit, that steadier supply is worth acting on rather than waiting out. The practices coming to market now tend to be well-established, profitable, and run by principals who genuinely want a considered handover rather than a quick sale at any price – which suits a buyer prepared to do proper due diligence and build a relationship with the outgoing principal, rather than one simply hunting for the lowest multiple going. That patience tends to be rewarded on both sides.
Digital records are no longer a someday project
If you’ve been putting off getting your own practice, or your clients, properly digitised, 2026 is the year that stops being optional. Making Tax Digital for Income Tax Self Assessment becomes mandatory this April for anyone with qualifying trading and property income over £50,000, with a £30,000 threshold following in April 2027. Survey data reported in the trade press this year suggested that while roughly half of accountants think their clients understand what’s coming, something like a quarter are still keeping entirely non-digital records. That gap is exactly where extra fee income sits for a practice that’s ready to handle it – and exactly where risk sits for one that isn’t.
From a buyer’s point of view, a practice that has already got its clients and its own internal systems onto a proper digital footing is a materially lower-risk purchase than one that’s going to need a year of onboarding work just as MTD deadlines start to bite. If you’re thinking about selling in the next year or two, this is one of the more concrete, controllable things you can do now to protect your price – and it doesn’t require waiting for the market to move in your favour.
AI hasn’t dented demand for accountants – but it is changing what buyers value
There’s understandably a lot of noise at the moment about artificial intelligence and what it means for the profession. The reassuring finding from ICAEW’s own research this year is that demand for accountants in the UK remains strong despite AI’s effect on how the work actually gets done; this is not, on the evidence so far, a story of the profession being replaced. What ICAEW has also said, though, is that AI adoption and continued consolidation are the two forces most shaping mid-tier firms right now – and in our experience the same dynamic is visible further down the market too. A practice that has begun putting AI-assisted tools to work in its compliance engine room, freeing up capacity for higher-value advisory work, is telling a prospective buyer something quite different about its future than one that hasn’t started down that road at all.
None of this means every seller needs to have reinvented their practice around AI before going to market. But buyers are increasingly asking about it, in much the same way they started asking about cloud software a decade ago, and it’s worth having a clear, honest answer ready rather than being caught out by the question.
The economic backdrop: cautious, not calm
Worth a brief word on the wider picture too, because it does colour buyer and seller confidence even when it doesn’t touch a deal directly. The Bank of England held its base rate at 3.75% in June, having been widely expected to keep cutting through the year before global energy price shocks pushed that path back up again; inflation had fallen to 2.8% by May but was expected to tick up again later in the year. Growth forecasts for the UK economy in 2026 have been modest – closer to 1% than anything stronger. None of that should stop a good deal happening. It simply means both sides are wise to go in with clear eyes about financing costs and client demand, rather than assuming last year’s conditions still apply this year.
Where goodwill multiples sit right now
The multiples chasing the very largest consolidator deals may be correcting, as the Xeinadin story shows. But for the well-run, profitable smaller practice – the kind where the principal isn’t the only thing holding the client relationships together – demand hasn’t gone away, and we continue to see vendors do best when they’re realistic about what “well-run” actually means to a buyer, rather than assuming reputation or longevity alone will carry the price. As ever, there’s no point achieving a high multiple on paper if the clients don’t stay and the clawback bites hard eighteen months later.
How you approach it still matters more than when
Our view back in 2022 was that so long as the rest of your life is in alignment, there’s no time like the present to start thinking seriously about buying or selling. That still holds. What’s changed less than you might expect is the advice underneath it: it’s not so much the when as the how. Do your research, decide honestly what level of support you actually want through the process, and be realistic about what you’re offering a buyer or asking of a vendor.
Would you rather have your hand held through the whole process, drawing on advice and guidance at every stage? Or are you comfortable finding your own way through what can be choppy, if occasionally glassy, waters? Either is a reasonable choice; what matters is making it deliberately, rather than drifting into a deal because a headline multiple or a persuasive approach from a buyer caught you at the wrong moment.
We gamble our own fee on achieving a minimum price within an agreed timeframe, which means we don’t take on instructions we don’t believe in – and we’d rather tell a vendor an uncomfortable truth at the outset than let them discover it at the negotiating table.
If you’d like to see how that approach has worked out for others, our testimonials page is a fair place to look; and if you’re thinking about what you could do now to strengthen your own practice’s position before a sale, we’ve written about that too.