Millions of homeowners across the UK are poised to see a significant shift in their property's value, with a typical home expected to gain around £80,000 in the next five years, according to a major new forecast.
A Five-Year Forecast for Property Values
The prestigious estate agency Savills has published its latest five-year residential property forecast, indicating that average house prices across the UK are set to climb by 22.2 per cent by 2030. This substantial growth would push the average house price to approximately £440,000.
This upward trajectory, however, is not expected to be immediate. The market is forecast to experience weak growth for the next two years before accelerating sharply. In 2029, analysts anticipate a significant jump of 5.5 per cent.
Regional Hotspots and Market Cycles
The report highlights that the growth will not be uniform across the country. The strongest performers are predicted to be in the more affordable regions. Yorkshire and the Humber and the Northeast are expected to lead the way, with prices forecast to rise by an impressive 28.8 per cent by 2030.
Dan Hill, a research analyst at Savills, explained the regional disparity: “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.”
Economic Influences and Mortgage Shifts
The property market continues to be influenced by broader economic factors. Lucian Cook from Savills commented on the impact of the budget, stating, “The budget continues to weigh on the market, although we expect any announcements to have a much greater impact on higher value transactions. Ultimately the biggest influence on the general market will come from how financial markets react to the budget itself.”
This forecast follows a notable shift in the mortgage landscape. Just weeks ago, HSBC became the first high street lender since the 2008 financial crisis to begin lending homebuyers up to 6.5 times their salary, a move that could increase purchasing power for some. HSBC UK competes in this space with other major lenders like Santander, NatWest, Nationwide, and Lloyds.
Looking at the specific yearly projections, Savills' latest forecast, updated in November, predicts a modest 2 per cent growth in 2026, a downward revision from the 4 per cent forecast in July. A key turning point is expected in 2028, which would mark the first time since 2022 that house prices see real-terms growth, setting the stage for the strong performance in 2029.
