UK house prices expected to fall further in 2027, London faces steepest decline

LONDON: Property consultancy Savills reported that house prices across the United Kingdom are expected to remain under pressure through 2027, with London forecast to record one of the sharpest declines.

The report projects that average UK house prices will fall by a further 1.5% in 2027, reducing the value of an average home by approximately £5,500.

Savills expects the housing market to begin recovering in the second half of 2028, with average house prices forecast to increase by 3.5% during that year.

London, the South East and the East of England are expected to experience a 3.5% decline in house prices in 2027, compared with the projected national decrease of 1.5%. In contrast, some northern regions are forecast to record modest growth.

As per reports, prolonged conflict in the Middle East is a major factor behind the uncertain economic outlook, with higher borrowing costs expected to continue affecting buyer confidence and affordability.

As per Savills, average mortgage rates are not expected to fall below 5% until early 2028, making home purchases more expensive for prospective buyers and keeping pressure on property prices.

The consultancy expects improving economic conditions and easing mortgage costs to support a gradual recovery from 2028. It forecasts that UK house prices could rise by 15.8%, or around £56,500, over the five years to 2031.