The Newshound

Britain's housing market will not recover until 2028 and house prices will fall 1.5% next year, property firm Savills warns

Estate agents' boards like these could become a more common sight as Savills forecasts mortgage rates will remain above 5 per cent until early 2028, prolonging the housing market downturn.
Estate agents' boards like these could become a more common sight as Savills forecasts mortgage rates will remain above 5 per cent until early 2028, prolonging the housing market downturn.

Savills predicts house prices will drop a further 1.5% across 2027 before any rebound, with the prolonged Middle East conflict keeping mortgage rates above 5% until early 2028. The Bank of England is expected to raise the base rate from 3.75% to 4% on Thursday, adding fresh pressure on the more than 2.3 million households coming off fixed-rate deals next year.

London is set to be the worst-hit region, with house prices growing just 8.1% over five years to 2031 versus 23.3% in the North West.

Savills does forecast a 15.8% rise — equivalent to £56,500 — by 2031, with first-time buyers expected to lead the recovery from 2028.

Average UK house prices currently stand at £273,566, with annual growth slipping to just 0.5% in October, its slowest rate for over two years.

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