Average UK property prices are forecast to climb by 24.5% over the next five years, according to updated projections from Savills. While 2025 is expected to see minimal growth, a combination of interest rate reductions and more flexible mortgage rules is set to drive momentum from 2026 onward. The medium-term outlook remains positive, with regional markets outside London predicted to lead the charge.
- Average property value could increase by £86,300 over five years.
- 2025 growth forecast revised down to 1%, from 4% previously.
- Annual growth predicted at 4% in 2026, 6% in 2027 and 2028, and 5.5% in 2029.
- London expected to see more modest growth at 15.3%.
- Mortgage stress test easing may help more first-time buyers enter the market.
- Ongoing geopolitical uncertainty cited as a factor limiting short-term confidence.
Original article source: Property118
Savills’ forecast offers a timely reminder of the UK property market’s underlying resilience and why long-term investors continue to view it as a stable asset class. While the near-term slowdown in 2025 may reflect broader geopolitical caution, the structural fundamentals remain intact.
Crucially, the medium-term outlook isn’t being driven by speculation or sentiment, it’s underpinned by tangible shifts in financial access. The loosening of mortgage affordability stress tests and higher allowable loan-to-income ratios could meaningfully widen the buyer pool, particularly for first-time entrants who’ve struggled to keep pace with house price inflation over the past decade.
The regional forecast breakdown is especially noteworthy. Projected growth of over 30% in the North West and similarly strong gains in Scotland and Wales reinforces the trend of value migration away from London. While the capital remains a global asset hub, tax sensitivity and pricing ceilings continue to dampen short-term appreciation potential.
Instead, markets with lower entry points and stronger capacity for growth are emerging as compelling plays for those with a five-year view. The fact that even with a flat 2025, Savills expects compound growth averaging nearly 5% per year through to 2029, should give confidence to investors weighing timing versus opportunity.
More broadly, this outlook supports a cautious but optimistic stance – timing may matter less than trajectory, and for those already positioned or planning to enter during a quieter year, the conditions are aligning for renewed upward pressure in the years ahead.
