Savills reveals the areas where house prices are forecast to rise the most over five years

House prices are expected to continue to rise slowly, according to Savills.

Real estate agents predict home values ​​will increase by an average of 22.2 percent over the next five years.

However, this will vary depending on the UK; two regions will grow by about 29 percent, while another will grow by less than 14 percent.

Following the 2008 crash, house prices hit bottom in March 2009 and then slowly increased by 17.4 percent over the next five years, ending in 2014.

Since then, according to Land Registry figures, house price increases have increased by an average of around 23.5 percent every five years; An increase of 32 percent was recorded between 2012 and 2017, and a 16.5 percent increase between 2010 and 2015.

Savills says weak buyer confidence and concerns about the economy will keep prices in check for the foreseeable future.

Any changes to property taxes in the budget could also have an impact.

House prices are expected to finish this year just 1 per cent higher than when they started, then rise just 2 per cent in 2026, according to Savills.

However, according to the real estate agent, prices are expected to start recovering again from now on; An increase of 4 percent is predicted for 2027 and 5 percent 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 by properties purchased with a mortgage.

The average house price by this measure is currently £359,875 and will rise to £439,806 by 2030; This represents an increase of around £80,000.

The housing market remains under pressure throughout 2025 due to a relatively high number of homes for sale due to weak demand from buyers. This created a buyer’s market where price increases were limited.

Savills’ forecast predicts that both demand and price growth will be quite slow for the rest of this year and into 2026.

‘Our previous forecast was for a decline’ interest rates “This will increase borrowing and investment, supporting house price growth,” says Lucian Cook, head of housing research at Savills.

‘But with this inflation Stuck at 3.8 percent, economists are less confident about the pace of rate cuts.

‘Higher interest rates and mortgage rates Next year, a weaker labor market is likely to limit price growth, with unemployment rising slightly and wage growth slowing.’

Budget’s ‘biggest impact’ on property market

According to Cook, the upcoming budget continues to put pressure on the market.

He adds: ‘Direct changes to transactional taxes could alter the incentives that currently shape buyers’ housing decisions; Broader tax increases on certain population segments could reduce the ability of some potential buyers to finance home purchases.

‘However, ultimately the biggest impact on the mainstream market will come from how financial markets react to the Budget.’

Beyond 2026, Savills is more optimistic about house prices due to forecasts of low inflation, rising GDP growth, falling unemployment and an insufficient supply of new homes, which he says will boost house prices.

As a result, he says, home values ​​will rise in real terms for the first time since the end of 2022, taking inflation into account from 2028.

Savills bases its forecasts on the assumption that inflation will increase by only 11.6 percent over the next five years.

His forecast also assumes interest rates will drop to 3.5 percent next year, 3 percent in 2027, and eventually 2.5 percent in 2029.

This is based on economic forecasts from Oxford Economics. There are many economists who do not expect interest rates to fall this much.

Where will housing prices increase the most?

Savills predicts that homes in London will experience the least growth over the next five years.

House prices in the capital are expected to increase by just 13.6 percent between now and the end of 2030.

Over the last five years, average property prices in London have increased by just 8 per cent, while the UK average has risen by 23.7 per cent.

Even in the last 10 years, property prices in London increased by 21.1 percent, while this rate in the United Kingdom was 46.2 percent.

While London looks set to continue the stagnation in house prices, Savills expects more affordable areas in the North and Scotland to outperform the UK average.

Savills expects prices in the North East, Yorkshire and The Humber to be 28.8 per cent higher than now by the end of 2030.

Prices in Scotland, Wales and the North West are expected to rise by 27.6 per cent over the next five years.

Meanwhile, prices in the West Midlands and East Midlands are also predicted to rise more than the UK average, with prices set to rise by 24.6 percent and 24 percent respectively over the next five years.

‘Regional performance is largely influenced by where we are in the housing market cycle,’ said Savills research analyst Dan Hill.

‘Since 2016 we have been in the second half of the cycle, where more affordable areas in the North and Scotland have outperformed the UK average, and growth capacity in London and the South has been more limited.

‘Absent a full correction in market prices, this pattern is likely to continue for the next five years; The strongest growth will shift to late-stage markets in the North East, Scotland and Wales.

Values ​​in the North West are expected to remain just 15 per cent below the UK average by the end of 2030, down from almost 30 per cent a decade ago, says Savills.

Meanwhile, London prices are expected to be 33 percent above average, down from 70 percent in 2017.