The five-year mainstream house price forecast expects average house prices to rise by 2% in 2026 and by 22.2% by the end of the five years to 2030

Average house prices are set to rise by £80,000 over the next five years, according to the latest house price forecast by property firm Savills.

The five-year mainstream house price forecast expects average house prices to rise by 2% in 2026 and by 22.2% by the end of the five years to 2030.

Weaker sentiment and concerns about the economy and tax environment have left the housing market subdued over 2025, with Savills predicting that both demand and price growth will be fairly slow for the rest of this year and into early 2026 as well.

Over the longer term, while the pace of interest rate cuts is slower than expected, they will still play a role in boosting demand and driving price growth over the next five years, says Savills.

Further cuts will be supported by the relaxation of mortgage rules earlier this year, allowing some buyers to borrow more relative to their incomes. Beyond 2026, the UK economy is also expected to be materially stronger, with low inflation, rising GDP growth, falling unemployment, and an undersupply of new homes which will maintain upwards pressure on real prices.

Savills expects house prices to rise by 22.2% in the next five years, peaking in 2028 and 2029 at 5.0% and 5.5%, respectively.

Importantly, values will grow in real terms from 2028, for the first time since the end of 2022.

Transaction volumes are expected to drop in 2026, following this year’s boost from stamp duty changes. But over the next five years, increased affordability is expected to drive transaction volumes close to the pre-pandemic average.

Lucian Cook, head of residential research at Savills, commented: 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.

Dan Hill, research analyst at Savills, added: 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.