House prices are forecast to continue rising at a subdued pace, according to Savills.
Over the next five years, the estate agent is predicting home values will rise by 22.2 per cent on average.
This will vary across Britain, though, with two regions tipped for growth of nearly 29 per cent while another is set for less than 14 per cent.
Following the 2008 crash, house prices reached rock bottom in March 2009 before slowly rising 17.4 per cent over the next five years, ending in 2014.
Since then, house price rises have averaged around 23.5 per cent growth every five years, based on Land Registry figures, with a 32 per cent increase recorded between 2012 and 2017 and a 16.5 per cent rise between 2010 and 2015.
Savills says that weaker buyer confidence and concerns about the economy will keep prices in check in the near future.
Any changes to property taxes in the Budget could also have an effect.
House prices are expected to finish this year just 1 per cent higher than when they started, according to Savills, before rising a mere 2 per cent in 2026.
| 2025 | 2026 | 2027 | 2028 | 2029 | 2030 | Total growth | |
|---|---|---|---|---|---|---|---|
| Average UK price growth (%) | 1% | 2% | 4% | 5% | 5.5% | 4% | 22.2% |
| Average UK house price (£) | £359,875 | £367,073 | £381,756 | £400,844 | £422,890 | £439,806 | £79,930 |
| Source: Savills research using Oxford Economics and Nationwide | |||||||
| *Forecasts apply to average prices in the second hand market not new build values | |||||||
However, thereafter prices should start to pick up again, according to the estate agent, with a 4 per cent increase forecast for 2027 and a 5 per cent rise in 2028.
This is based on what Savills calls the 'mainstream market.' The data applies to second-hand homes, not new-builds, and is weighted towards properties being bought with mortgages.
According to its measure, the average house price is now £359,875 and will rise to £439,806 by 2030 - an increase of around £80,000.
The housing market has been subdued over 2025 with a relatively high number of homes for sale set against weaker demand from buyers. This has created a buyer's market in which price rises have been limited.
Savills' forecast expects that both demand and price growth will be fairly slow for the rest of this year and into 2026 as well.
'Our previous forecast assumed falling interest rates would boost borrowing and investment, supporting house price growth,' says Lucian Cook, head of residential research at Savills.
'However, with inflation stuck at 3.8 per cent, economists are less confident about the pace in which rate cuts will happen.
'Higher interest and mortgage rates next year, as well as a weaker labour market, with a slight rise in unemployment and slowing wage growth, are likely to constrain price growth.'
Budget 'biggest influence' on property market
The upcoming Budget also continues to weigh on the market, according to Cook.
He adds: 'Direct changes to transactional taxes could alter the incentives that currently shape buyers' housing decisions, while broader tax increases on certain population segments could reduce some prospective buyers' capacity to finance home purchases.
'Ultimately, however, the biggest influence on the mainstream market will come from how financial markets react to the Budget itself.'
Beyond 2026, Savills is more upbeat on house prices due to forecasts around lower inflation, rising GDP growth, falling unemployment, and an under-supply of new homes which it says will drive up house prices.
As a result, it says house values will grow in real terms - factoring in inflation - from 2028, for the first time since the end of 2022.
Savills is basing its forecasts on the assumption that inflation will only rise 11.6 per cent over the next five years.
Its forecast also assumes that interest rates will fall to 3.5 per cent next year, 3 per cent in 2027 and eventually 2.5 per cent in 2029.
This is based on economic forecasts by Oxford Economics. There are many economists who don't expect interest rates to fall that far.
Where will house prices rise most?
Savills is forecasting that homes in London will experience the least growth over the next five years.
House prices in the capital are expected to rise by just 13.6 per cent between now and the end of 2030.
Over the last five years, average property prices in London have risen just 8 per cent compared to an average of 23.7 per cent across the UK as a whole.
Even over the last 10 years, London property prices are up 21.1 per cent compared to 46.2 per cent across the UK as a whole.
While London looks set to remain in the house price doldrums, Savills expects more affordable regions in the North and Scotland to outperform the UK average.
By the end of 2030, Savills expects prices in the North East, Yorkshire and The Humber to be 28.8 per cent higher than they are now.
Scotland, Wales and the North West are all forecast to see prices rise 27.6 per cent over the next five years.
Meanwhile, the West Midlands and the East Midlands will also see prices rise more than the UK average, with prices rising 24.6 per cent and 24 per cent respectively over the next five years.
'Regional performance is largely influenced by where we are in the housing market cycle,' said Dan Hill, research analyst at Savills.
'Since 2016, we've been in the second half of the cycle, where the more affordable regions in the North and Scotland outperform the UK average, and capacity for growth in London and the South is more limited.
'In the absence of any whole market price correction, this pattern is likely to persist for the next five years, with the strongest growth shifting to late-stage markets in the North East, Scotland and Wales.
By the end of 2030, Savills says values in the North West are expected to sit just 15 per cent below the UK average, narrowing from nearly 30 per cent a decade earlier.
Meanwhile, London prices are set to be 33 per cent above the average - down from 70 per cent in 2017.
