Elevated borrowing costs and inflation are continuing to suppress UK buyer affordability, with average property values projected to fall by 1.5% in 2027. More than 2.3 million households face steep payment increases next year as their fixed-rate mortgage deals expire. However, a resilient labor market is expected to prevent a severe crash before conditions improve. Savills anticipates a rebound beginning in 2028, supported by first-time buyer assistance schemes and rising real affordability.
Key points
Savills projects that UK average house prices will decline by 1.5% during 2027 before emb…: Savills projects that UK average house prices will decline by 1.5% during 2027 before embarking on a recovery.
A market rebound is forecast to yield a 3.5% rise in property values across 2028.: A market rebound is forecast to yield a 3.5% rise in property values across 2028.
Total home price growth is projected to reach 15.8% by 2031, led by northern England, Wal…: Total home price growth is projected to reach 15.8% by 2031, led by northern England, Wales, and Scotland.
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Britain’s sluggish housing market is not expected to recover until 2028 as higher mortgage rates linked to the war in the Middle East deter buyers and weigh on prices.
The property firm Savills said average house prices were expected to drift lower during the rest of 2026 and fall by 1.5% in 2027, as the prolonged conflict undermines buyers’ confidence and keeps mortgage rates higher for longer.
Improving economic prospects and mortgage affordability are expected to support a recovery from 2028.
Savills expects house prices to rise by 15.8% – or £56,500 on average – over the five years to 2031, with values starting to recover in the second half of 2028.
Nationwide said last week that UK house prices had risen by an annual rate of just 0.5% in October, the slowest pace in more than two years. The average price for a property in the UK stood at £273,566, the lender said.
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