Britain’s housing market recovery has been pushed back again. Property firm Savills now expects average UK house prices to drift lower through the rest of 2026 and fall by 1.5% in 2027, with values only starting to recover in the second half of 2028, according to its updated forecast published on Wednesday 4 November.
The numbers in the forecast
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 from the second half of 2028, Show House reports. In cash terms the firm expects 2027 to take £5,500 off the average price, followed by a £12,500 gain in 2028 and £18,500 in 2029. The peak-to-trough decline through 2027 is put at around 3.0%. Average mortgage rates are now not expected to fall below 5% until early 2028, a deterioration since Savills’ previous forecast in June 2026.
Why the delay
The drawn-out conflict in the Middle East has pushed back the prospect of meaningful mortgage-rate relief, which will weigh on buyer sentiment and affordability, Savills director of residential research Emily Williams said, as quoted by Show House and BusinessLive. The Guardian’s coverage of the same forecast notes that Nationwide reported UK house prices rising by just 0.5% annually in October, the slowest pace in more than two years, with the average property at £273,566. The Bank of England is widely expected to raise interest rates from 3.75% to 4% on Thursday, adding further pressure.
First-time buyers lead the eventual recovery
Savills expects first-time buyers to spearhead the recovery from 2028, helped by deposit affordability at its best level since 2008 and government schemes. The strongest five-year growth in percentage terms is forecast across northern England, Wales and Scotland, where relative affordability is better, while London is expected to lag. For anyone planning a move, the message is patience: the forecast points to a buyer’s market through 2027, but not a crash.
