UK property prices are forecast to grow by 22% on average over the next five years, with northern England, Wales and Scotland set to see the biggest rises.
The average house price in the UK is expected to increase by £80,000 between 2025 and 2030 as interest rates fall and the economic outlook improves, new research suggests.
MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Yorkshire and The Humber, North East England, Scotland, Wales and North West England will see the biggest appreciation – upwards of 27.5% – the estate agency said.
Meanwhile, beyond 2026, the UK economy is expected to be stronger, with lower inflation, rising GDP growth, falling unemployment and an undersupply of new homes which will maintain “upwards pressure” on prices.
| 2025 | 2026 | 2027 | 2028 | 2029 | 2030 | Total growth |
Average UK price growth (%) | 1.0% | 2.0% | 4.0% | 5.0% | 5.5% | 4.0% | 22.2% |
Average UK house price (£) | £359,875 | £367,073 | £381,756 | £400,844 | £422,890 | £439,806 | £79,930 |
Transactions | 1,175,000 | 1,150,000 | 1,170,000 | 1,175,000 | 1,180,000 | 1,190,000 | - |
Base rate (year-end) | 4.00% | 3.50% | 3.00% | 2.75% | 2.50% | 2.50% | - |
CPI inflation (year-end) | 3.8% | 2.6% | 2.3% | 2.1% | 2.1% | 2.0% | 11.6% |
Nominal income growth | 3.3% | 2.4% | 2.4% | 3.4% | 3.2% | 2.9% | 15.3% |
Real GDP growth | 1.4% | 1.0% | 1.5% | 1.8% | 1.6% | 1.6% | 7.7% |
Where are house prices set to grow the most in Britain?
Across the mainstream market, Yorkshire and The Humber and North East England are expected to see the biggest house price growth between 2025 and 2030, with property values surging by 28.8% there.
Meanwhile, prices are forecast to rise by 27.6% in Scotland, Wales and North West England. The West Midlands and East Midlands are expected to see 24.6% and 24% increases, respectively.
Savills said it anticipates affordability will be the biggest driver of house price growth in these areas, with London and South East England having less room to see growth as prices there are already so high in comparison to the rest of Britain.
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.”
By 2030, Savills forecasts house values in the North West to sit just 15% below the UK average, narrowing from almost 30% in 2020.
Meanwhile, London prices are set to be 33% above the average – down from 70% in 2017.
Region | 2026 | 2027 | 2028 | 2029 | 2030 | 5 years to 2030 |
Yorkshire and The Humber | 3.5% | 5.5% | 6.0% | 6.0% | 5.0% | 28.8% |
North East | 3.5% | 5.5% | 6.0% | 6.0% | 5.0% | 28.8% |
Scotland | 3.0% | 5.0% | 6.0% | 6.0% | 5.0% | 27.6% |
Wales | 3.0% | 5.0% | 6.0% | 6.0% | 5.0% | 27.6% |
North West | 3.0% | 5.5% | 6.0% | 6.0% | 4.5% | 27.6% |
West Midlands | 2.5% | 4.5% | 5.5% | 6.0% | 4.0% | 24.6% |
East Midlands | 2.5% | 4.0% | 5.5% | 6.0% | 4.0% | 24.0% |
UK | 2.0% | 4.0% | 5.0% | 5.5% | 4.0% | 22.2% |
South West | 2.0% | 4.0% | 5.0% | 5.0% | 3.5% | 21.0% |
East of England | 1.5% | 3.5% | 4.5% | 5.0% | 3.5% | 19.3% |
South East | 1.0% | 3.0% | 4.0% | 4.5% | 3.5% | 17.0% |
London | 0.0% | 2.0% | 3.5% | 4.5% | 3.0% | 13.6% |
First-time buyers expected to drive market activity
Savills said increased housing affordability across Britain will drive transaction numbers over the next five years, and close to pre-pandemic averages.
According to the estate agency, the number of completed housing transactions in August was 10% below the 2017-2019 level.
Activity fell sharply but briefly during the pandemic, but rose when the property market reopened and the stamp duty holiday was introduced in summer of 2020.
However, high inflation, rising interest rates and the end of the stamp duty holiday after this led to a reduction in transaction numbers.
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.”
However, weaker sentiment has not hit first-time buyers as much, Savills said, with their purchasing power improving the most.
For second steppers, slower price growth for flats is limiting their ability to move up the ladder in the short term, but mortgaged home movers should drive price growth as interest rates fall.
Meanwhile, buy-to-let transactional activity has been sustained by smaller landlords selling up to larger ones.
This is expected to ramp up now the Renters’ Rights Bill has become law, supported by lower rates and higher rents, although tighter regulation and taxation will limit growth of this sector, it said.
-
How to shield your money as Reeves refuses to rule out income tax hikes and warns of ‘necessary choices’Chancellor Rachel Reeves appeared to lay the groundwork for higher taxes in the Autumn Budget on Tuesday morning and refused to stand by her manifesto pledge not to increase income tax.
-
UK state pension is least generous in the G7 – how do other rich countries compare?British retirees get substantially less in state pension than in other wealthy nations, and for fewer years, but the balance is a lower tax burden on working age people
