Savills UK House Price Forecast 2027: Prices to Fall Next Year Before £56,500 Rise by 2031

Savills has published its updated Savills UK house price forecast 2027, and the headline is a delayed recovery rather than a sudden collapse. The property firm expects average UK house prices to fall by 1.5% in 2027, after a broadly flat 2026, before growth returns in the second half of 2028. Over the five years to 2031, it forecasts a 15.8% rise, worth £56,500 on average.

The downgrade, reported on 4 November 2026, reflects mortgage rates staying higher for longer. Savills links that pressure to the prolonged conflict in the Middle East, which it says has pushed back meaningful mortgage-rate relief. Buyers, sellers and lenders should therefore treat the next year as a holding phase, not the start of a sustained rebound.

Why the Savills UK house price forecast 2027 was downgraded

Savills says the outlook has deteriorated since its previous forecast in June. The firm no longer expects average mortgage rates to drop below 5% until early 2028, according to trade reporting of the forecast. Its assumptions put Bank Rate at 4.25% by the end of 2027, then 3.25% in 2028 and 3% in 2029.

Emily Williams, director of residential research at Savills, said the drawn-out Middle East conflict had delayed the prospect of meaningful mortgage-rate relief. She said that delay would weigh on buyer sentiment and affordability, and would suppress activity and put pressure on prices next year. She also said a sharper correction was unlikely, a point that matters for homeowners worried about a sudden collapse.

The near-term picture is therefore one of drift rather than freefall. Savills expects prices to edge lower through the rest of 2026 and through 2027, producing a peak-to-trough fall of about 3%. That framing separates a modest, forecast-led decline from the far larger falls suggested by some independent commentators in the same coverage.

What the recovery from late 2028 would look like

The Savills UK house price forecast 2027 points to growth gathering pace in the second half of 2028, reaching 3.5% for that year as a whole. Growth is then forecast at 5% in both 2029 and 2030, before easing to 3% in 2031.

First-time buyers are expected to lead the recovery, helped by deposit affordability and government initiatives including the Your First Home scheme.

Existing homeowners, by contrast, are more likely to sit tight. Savills expects fewer forced sales and a gradual return of discretionary moves once rates fall.

For the market as a whole, the pattern is therefore a delayed, not a cancelled, recovery. The five-year gain still leaves prices materially higher than today, even after the 2027 dip.

What it means for buyers, sellers and homeowners

For buyers, the forecast suggests patience may be rewarded. A 1.5% fall in 2027, followed by growth from late 2028, means rushing to buy before the dip could leave a purchase briefly underwater.

For sellers, the message is more sobering. Pricing ahead of the market risks a longer time on the market and a later reduction, while realistic pricing remains the fastest route to a sale.

For homeowners not planning to move, the forecast is less urgent. A peak-to-trough fall of about 3% is modest by historical standards, and the five-year outlook still points to a higher average value.

For buy-to-let landlords, Savills expects rents to keep rising, although at a slower pace than in recent years. That could support yields even as capital values dip in 2027.

Sources and what to watch next

Property Industry Eye has published a detailed account of the forecast, including the regional outlook and the expected path of mortgage rates.

Business Live has also reported the forecast, with a focus on the delayed recovery and the implications for the wider economy.

The next test will be the Bank of England’s rate decisions and the Budget. If rates fall faster than Savills assumes, the 2027 dip could be shallower; if they stay higher for longer, the recovery could slip further.

Readers planning for later life can also read our guide to the UK Guided Retirement Pension Plan: Default Income for Life Explained, which explains how the new default income-for-life option works.

Frequently asked questions

Will UK house prices fall in 2027?

Yes, Savills forecasts a 1.5% fall in average UK house prices in 2027, after a broadly flat 2026.

How much will UK house prices rise by 2031?

Savills forecasts a 15.8% rise over the five years to 2031, worth about £56,500 on the average home.

When will house prices recover?

Savills expects growth to return in the second half of 2028, with 3.5% growth in 2028, 5% in 2029 and 2030, and 3% in 2031.

Is now a good time to buy a house in the UK?

It depends on personal circumstances. Savills’ forecast suggests buyers who can wait may benefit from lower prices in 2027, but timing the market exactly is difficult and mortgage rates remain the key variable.

What is driving the Savills downgrade?

Higher-for-longer mortgage rates, linked to the prolonged Middle East conflict, which has delayed the prospect of meaningful mortgage-rate relief.