The start of a new year prompts people to review their plans. For many, that might include a resolution to move home. As market conditions evolve, prospective buyers and sellers wonder what will happen with property prices in 2026 and beyond.
Understanding the Five-Year Housing Forecast
The latest five-year forecast from Savills provides a useful insight into what is to come. This includes specific predictions for house prices between now and 2030. The report predicts that house price growth will be slow in the near future. Specifically, experts project a growth rate of 2.0% in 2026. This subdued performance happens because of ongoing economic uncertainty and weak buyer demand.
Looking further ahead, the landscape becomes more positive. Interest rates and mortgage costs will likely ease soon. Consequently, lower rates should boost activity in the housing market. Savills anticipates an annual house price growth of 4% in 2027. They also predict 5% growth in 2028 before a peak of 5.5% in 2029. Over this five-year period, overall property values should increase by 22.2%.
Analysing the 2026 Regional Outlook
The report indicates that regional differences in house price growth will persist in the coming years. For instance, the North East and Yorkshire and the Humber will record the strongest performance between now and 2030. Prices should increase by 28.8% in both areas. On the other hand, London (13.6%) and the South East (17.0%) will likely see much weaker growth. Affordability challenges continue to limit house price growth in these spots.
Improving Conditions for First-Time Buyers
Savills noted that first-time buyers (FTBs) remain a driving force in the housing market. In recent years, it has been notoriously difficult to get onto the property ladder. Therefore, it is promising to see that FTBs are growing in confidence. In fact, new homeowners are the only buyer group to record activity above pre-pandemic levels. Interestingly, FTBs are the most active group in the capital. This remains true despite London being the most expensive place to buy in the UK.
Modern Challenges for Upsizers
Conditions are a little more challenging for ‘second steppers’ who want to move on from their first home. Weak growth in flat values means that this group of sellers is less likely to make a good profit. To fund a bigger property, many second-steppers rely on their initial deposit as their primary equity source. As a result, the number of home movers sits well below the levels seen in 2017-19. However, activity should pick up as interest rates fall and house price growth strengthens.
Expert Mortgage Solutions for Your Move
We can help you navigate the changing property market. With the right advice, you can turn your property dreams into a reality. Get in touch with us today. You can easily view our current Mortgages options or speak to a broker on our dedicated Mortgage Advice page to lock in the best terms for your new home.
Read the full data insights at the This Is Money Savills Report
and the official Savills Research Article.
