Savills has forecast average UK house prices to rise by 22.2% over the next five years, adding around £80,000 to the current average.
According to Savills, house prices are expected to increase by 2% in 2026, or £7,200, with the average reaching £439,806 by 2030.
House price growth is set to be steady, with 1% growth in 2025, followed by 2% in 2026, and peaking at 5.5% in 2029.
The number of transactions is expected to remain close to the pre-pandemic average, with 1.15 million in 2026, rising to 1.19 million by 2030.
Lucian Cook, head of residential research at Savills, said: “Our previous forecast assumed falling interest rates would boost borrowing and investment, supporting house price growth.
“However, with inflation stuck at 3.8%, economists are less confident about the pace in which rate cuts will happen.
“Higher interest and mortgage rates next year, as well as a weaker Labour market, with a slight rise in unemployment and slowing wage growth, are likely to constrain price growth.”
Cook added: “The upcoming Budget also continues to weigh on the market, although we expect any announcements to have a much greater impact on prime values and transactions than the mainstream market.
“Direct changes to transactional taxes could alter the incentives that currently shape buyers’ housing decisions, while broader tax increases on certain population segments could reduce some prospective buyers’ capacity to finance home purchases.
“Ultimately, however, the biggest influence on the mainstream market will come from how financial markets react to the Budget itself.”
Looking further ahead, Savills expects interest rate cuts and looser mortgage rules to help boost demand and price growth after 2026.
The forecast showed house price growth will be strongest in the North East, North West, Yorkshire and The Humber, Scotland, and Wales, with these regions expected to see increases of around 28% by 2030.
London and the South East are set for lower growth, with London at 13.6% and the South East at 17%.
Emily Williams, director research at Savills, said: “Housing is technically more accessible now than at any point in the last three years, thanks to lower mortgage rates, lower real house prices and looser mortgage regulation.
“But none of this matters unless buyers feel confident enough to commit – and weaker sentiment is holding back transactions.”
First-time buyer (FTB) activity is expected to stay strong, with improved affordability helping this group, while second steppers are seeing slower growth in flat prices, limiting their ability to move up the ladder.
Buy-to-let (BTL) activity is being driven by smaller landlords selling to larger ones, with more movement expected once the Renters Rights Bill becomes law.
Dan Hill, research analyst at Savills, said: “Regional performance is largely influenced by where we are in the housing market cycle. Since 2016, we’ve been in the second half of the cycle, where the more affordable regions in the North and Scotland outperform the UK average, and capacity for growth in London and the South is more limited.
“In the absence of any whole market price correction, this pattern is likely to persist for the next five years, with the strongest growth shifting to late-stage markets in the North East, Scotland & Wales.”
