by Amir Iqbal
Introduction
If you are thinking of buying a home in the UK, the biggest question right now is simple: will prices fall in 2027? The most-watched forecast of the autumn says yes — but only a little, and not for long.
On 4 November 2026, Savills, one of the UK’s largest estate agents, published its latest five-year forecast. It expects average UK house prices to keep drifting lower for the rest of 2026 and then fall by 1.5% in 2027 — about £5,500 on the average home — before growth returns in the second half of 2028. Over the five years to 2031, Savills expects prices to rise by 15.8%, or about £56,500 on average.
Other forecasters disagree. Rightmove expects prices to end 2026 between 0% and 2% lower. Zoopla expects a small rise of 0.5%. The HomeOwners Alliance expects about 2% growth in 2026. And Connells, another big agency group, expects prices to rise 1.5% in 2027 — the opposite of Savills. In this guide we explain what Savills actually forecast, why prices are under pressure, what it means for buyers, sellers and overseas investors, and where prices are expected to grow fastest.
What Savills Actually Forecast
Savills’ November 2026 forecast, reported by the Evening Standard and The Guardian on 4 November, gives the following picture for average mainstream UK house prices:
| Year | Savills forecast |
|---|---|
| Rest of 2026 | Prices keep drifting lower |
| 2027 | Fall of 1.5% (about £5,500) |
| Peak to trough | Total fall of around 3% |
| 2028 | Growth returns in the second half; 3.5% for the year |
| 2029 | Growth of 5.0% |
| 2030 | Growth of 5.0% |
| Five years to 2031 | Up 15.8% (about £56,500) |
This is a sharp change from Savills’ June 2026 forecast, which expected a 2% fall in 2026 and then growth of 2.5% in 2027. The recovery has been pushed back by about a year. Emily Williams, director of residential research at Savills, said the drawn-out conflict in the Middle East has pushed back the prospect of meaningful mortgage rate relief, and that is what changed the forecast.
The strongest growth over the next five years is expected in the North of England, Wales and Scotland, where homes are cheaper and there is more room for values to climb. First-time buyers are expected to lead the recovery from 2028, helped by deposit affordability and government initiatives including the Your First Home scheme.
Why Prices Are Under Pressure
Three forces are squeezing the UK housing market at the same time.
Mortgage rates are high and staying high. The Bank of England raised its base rate from 3.75% to 4% on 5 November 2026 — the first rise since August 2023 — after inflation rose to 3.5% in September, well above the 2% target. Savills now expects average mortgage rates to stay above 5% until early 2028. Its central case has the base rate at 4.00% at the end of 2026 and 4.25% at the end of 2027, with the average mortgage rate at 5.32% this year-end and 5.09% at the end of 2027. Moneyfacts figures put the average two-year fixed mortgage at 5.97% and the average five-year fix at 5.99%, although big lenders cut some deals below 5% in early November — Barclays cut a two-year fix to 4.95% and Halifax to 4.97% for borrowers with large deposits, and Nationwide’s lowest fix was 4.89%.
The mortgage cliff is coming. More than 2 million households come off fixed-rate mortgages in 2027 and move onto sharply higher payments. That squeezes household budgets and takes buyers out of the market, even as prices fall. Savills’ own summary of the problem is blunt: for many households, the price on the door goes down but the monthly bill goes up.
Prices have barely moved for two years. Nationwide reported that UK house prices rose by just 0.5% in the year to October 2026 — the slowest pace in more than two years — with the average home at £273,566. Lloyds reported a steeper monthly fall: the average home fell 0.6% in October to £296,285, the biggest monthly drop in more than three years, and prices were 1.2% lower than in October 2025, the biggest annual fall since October 2023. Lloyds stressed that prices have changed relatively little over the past couple of years and said it does not expect a sustained period of falling prices, even if conditions stay subdued in the near term.
What a 1.5% Fall Actually Means for You
A 1.5% fall sounds small, and in cash terms it is — about £5,500 on the average home. But whether it helps or hurts you depends on which side of the deal you are on.
If you are buying, a small price fall is not the main prize. The monthly mortgage payment matters far more than the price. With the average two-year fix near 6%, a £5,500 price cut saves you very little per month, while the rate itself adds hundreds of pounds a month compared with the cheap fixes of a few years ago. Zoopla estimates that higher mortgage rates have already cut buying power by 9% since the start of the year. The real opportunity for buyers is choice: with demand soft, sellers are more willing to negotiate, and asking prices in parts of London and the South East have already been cut. That is also what is drawing overseas buyers back — a weaker pound and softer prices in London make the top end of the market look better value than it has in a decade.
If you are selling, do not panic about 1.5%. A total peak-to-trough fall of around 3% is small by the standards of past downturns, and Savills expects the market to recover from the second half of 2028. But do price realistically: homes priced above the market are sitting unsold while correctly priced homes still sell. If you must sell in 2027, a small price cut now may be cheaper than months of mortgage payments on an empty home.
If you are an overseas investor, the picture is mixed but workable. UK prices are soft, the pound is weaker than it was, and rental demand is strong — average private rents were about £1,400 a month in August 2026. But remember the extra costs: overseas buyers pay a 2% stamp duty surcharge on top of the normal rates, plus a 5% surcharge on buy-to-let purchases. On a £450,000 purchase that can mean £44,000 in stamp duty. Check the current rules on the GOV.UK stamp duty guidance before you budget. Browse London properties for sale and rent and Manchester properties for sale and rent to compare prices and yields.
Where Prices Are Expected to Grow Fastest
Savills expects the strongest five-year growth in the North of England, Wales and Scotland. The reason is simple: homes there are cheaper relative to local incomes, so there is more room for prices to rise as affordability improves. Northern cities also offer the best rental yields — Liverpool and Manchester lead the big cities, with gross flat yields of about 7.32% and 6.86% respectively in the twelve months to mid-2026, according to REalyse, against a UK average of about 5.96% and London at only 3–4%.
London is expected to recover more slowly. Prices there are already high, yields are low, and the market depends more on mortgage borrowing than the North. But London remains the UK’s deepest market, and overseas demand for prime London property is rising as asking prices soften. For income, look north; for the safest long-term market, look at London. Read our guide to the best rental cities in the USA and UK for the full city-by-city comparison.
How to Buy Well in a Falling Market
- Do not try to time the bottom. Nobody knows the exact month prices stop falling. If you find the right home at a price you can afford, and you plan to keep it for five years or more, a 1.5% move either way matters very little.
- Fix your mortgage costs first. Get a mortgage agreement in principle before you offer, and compare the monthly payment at today’s rates, not the rates you hope for next year. A two-year fix near 6% is the reality for most buyers right now.
- Negotiate hard, politely. In a soft market, asking prices are a starting point. Evidence of recent sold prices for similar homes on the same street is your best negotiating tool.
- Check the lease and the building. Most UK flats are leasehold. Check the remaining lease — value suffers once it drops below roughly 80 years — and check service charges before you offer.
- Budget for the tax. Overseas buyers should add the 2% non-resident stamp duty surcharge and the 5% buy-to-let surcharge to the budget before falling in love with a property. See properties for sale and rent in the UK to see what your budget buys, and narrow your search on the property search results page.
Mistakes to Avoid
- Waiting for a crash that is not forecast. Savills expects a 1.5% fall, not a collapse. Waiting a year to save £5,500 while paying rent and watching mortgage rates stay high is usually a bad trade.
- Buying on the headline rate. The cheapest fixed deals near 4.9% are for borrowers with large deposits. Most buyers pay well over 5%. Work out your real monthly payment.
- Ignoring the 2027 remortgage wave. If you buy with a two-year fix now, you will remortgage in 2028 — just as the market is expected to recover. Plan for the rate then, not just the rate now.
- Forgetting the stamp duty surcharges. The 2% non-resident surcharge and 5% buy-to-let surcharge are real money. A £450,000 buy-to-let purchase for an overseas buyer can carry £44,000 in stamp duty.
- Buying the wrong lease. A flat with under 80 years left on the lease loses value and can be costly to extend. Check it before you offer.
- Believing one forecast. Savills says -1.5% in 2027; Connells says +1.5%. Forecasts are estimates, not promises. Buy on affordability and your own plans, not on a prediction.
Frequently Asked Questions
Will UK house prices fall in 2027?
Savills forecasts a fall of 1.5% in 2027, about £5,500 on the average home, with a total peak-to-trough fall of around 3%. Not all forecasters agree — Connells expects prices to rise 1.5% in 2027. Growth is expected to return in the second half of 2028, reaching 3.5% for that year.
When will UK house prices recover?
Savills expects growth to return in the second half of 2028, reaching 3.5% for 2028 as a whole, then 5.0% in both 2029 and 2030. Over the five years to 2031, prices are expected to rise 15.8%, or about £56,500 on the average home.
What is the average UK house price now?
Nationwide put the average UK home at £273,566 in October 2026, up just 0.5% on a year earlier. Lloyds put the average at £296,285 in October 2026, down 0.6% on the month and 1.2% on the year. The two lenders use different methods, which is why their averages differ.
Are UK mortgage rates going down?
Not soon, according to Savills. Average mortgage rates are not expected to fall below 5% until early 2028. The Bank of England raised its base rate to 4% on 5 November 2026, and Moneyfacts puts the average two-year fix at 5.97% and the average five-year fix at 5.99%, although some lenders offer deals below 5% for large deposits.
Which UK regions will grow fastest?
The North of England, Wales and Scotland, according to Savills, because homes there are cheaper relative to local incomes. Northern cities also offer the highest rental yields — Liverpool around 7.32% and Manchester around 6.86% gross for flats.
Is 2027 a good year for overseas buyers to buy in the UK?
It can be. Prices are soft, the pound is weaker, and rental demand is strong, with average private rents around £1,400 a month. But budget for the 2% non-resident stamp duty surcharge plus the 5% buy-to-let surcharge, and check the mortgage rate you will actually pay before you commit.
Start Looking at Real Properties
Forecasts are useful, but the next step is seeing what your money actually buys. Browse live properties for sale and rent in the UK, compare prices in London, Manchester and Liverpool, and work out the yield on a real property instead of a headline figure. You can search everything on ZameenInfo.
