Will UK house prices fall in the next 5 years?

The Big Picture

Will UK house prices go down in the next five years? The short answer: most forecasts expect prices to rise modestly rather than fall, though regional variation is strong and there are significant risks.
Here are the key findings from recent research:

• According to Savills, UK mainstream house prices are expected to increase by about 23.4% over the next five years (to about end of 2029) from current levels. Savills
• A slightly more recent revision by Savills forecasts around 24.5% growth over five years. Savills
• Another forecast (via Savills) for 2024–28 puts cumulative growth around 21.6%, with variation by region (e.g., London much lower). Savills
• Conversely, some earlier scenario work (still by Savills) had headwinds: e.g., a possible ~‑10 % fall and then recovery, depending on rates and affordability. Savills

So the consensus is no major crash is widely expected — instead, gradual growth (or at worst, flat/very modest growth) is more likely. But “no crash” doesn’t mean “uniform growth” or “no risk”.

📉 Why Some People Fear a Fall

Here are the main risks that could push prices down (or at least cause stagnation) in the UK market:

1. High Interest Rates & Affordability

Mortgage borrowing costs matter a lot. If rates stay elevated, affordability falls and demand gets squeezed.
For example, the independent Office for Budget Responsibility (OBR) expects mortgage rates to remain higher for longer, which could dampen price growth. The Times

2. Economic Uncertainty / Slow Growth

If GDP growth is weak, unemployment rises or wage growth stalls, that tends to reduce buyer ability and confidence.

3. Increased Supply or Planning Reforms

More housing supply (or faster build‑out) can moderate price rises or in some local markets cause downward pressure. For instance, planning reforms are expected to boost building rates, which may have a “modest impact on house prices”. Financial Times

4. Regional / Market Segmentation

Some regions are more exposed: high‑value markets (e.g., London, South East) may struggle more than mid/low price regions. For example, Savills forecast that London might only see ~14% growth over five years in one scenario, compared with ~25–30% elsewhere. Savills+1

5. Buyer Behaviour & Transactions

If fewer people can move (due to tax changes, regulation, deposit size, etc.), then transaction volumes drop and price momentum could fade.

✅ Why Many Analysts Expect Growth Instead

Despite the risks, there are equally strong arguments for modest price rises:

• Borrowing costs are starting to ease (or expected to), which improves affordability over time.
• Long‑term structural undersupply of housing in many parts of the UK means demand still has a base.
• Some regional markets (especially outside London / southern high‑cost markets) are still relatively affordable and hence could outperform. For example, Savills expect the North West, Yorkshire & Humber to see stronger growth over five years in some forecasts. The Independent+1
• Inflation and wage growth: Real assets (like property) often provide a hedge against inflation (though obviously this isn’t guaranteed).

🔍 Regional & Segment Variation

It’s vital to emphasise: not all markets will behave the same. Some key distinctions:

• London & South East: These high‑price markets face the greatest affordability constraints, so growth forecasts are more modest (e.g., ~14‑18% over five years in one scenario). Savills+1
• Mid/Lower cost regions: Markets in the North West, Yorkshire, Scotland etc. have more room for growth and some forecasts show ~25‑30% gains over five years. The Independent+1
• New‑build vs second‑hand: Some forecasts apply only to second‑hand homes — new builds may perform differently (because of cost, energy‑efficiency standards, etc). Savills
• Segmentation by type (flats vs houses): Flats (especially in over‑supplied areas) may underperform relative to houses in regions with lower supply.

🧮 My View: What to Expect in the UK Next 5 Years

Putting all of this together, here’s a realistic scenario:

• Expect modest nominal growth rather than big falls. Something like +20‑30% over 5 years for average UK house prices is plausible (which aligns with the forecasts).
• But raise your expectations: This growth will be uneven across regions, with some markets flat or even slightly down in real terms (after inflation) and others doing well.
• Real (inflation‑adjusted) growth may be smaller — if inflation returns to ~2‑3% then nominal growth of ~4‑5% per year might translate into real growth of ~2‑3%.
• For a potential price fall: It isn’t the base case, but if a major shock hits (e.g., a big interest rate jump, economic downturn, sudden supply surge) then some local markets could see falls or stagnation.
• If you’re a buyer, focus on location and affordability: lower‑cost regions may offer better upside. If you’re a seller, in high‑cost overheated markets you may face slower growth and longer selling periods.

📌 What This Means for Buyers & Sellers

For Buyers:

• Don’t bank on massive house‑price leaps in the next few years; treat any growth as a bonus, not a given.
• Consider your budget and borrowing costs carefully: interest rate risk remains.
• If possible, target regions where affordability is better and growth potential stronger.
• Think long‑term: property is still a long‑term asset. Over five years the growth may be moderate; over ten or more years the picture might improve.

For Sellers:

• If you’re in a high‑cost market and need to sell, don’t assume big gains; price realistically.
• Consider timing: in stronger‑growth regions you may still do well, but expect more competition and possibly slower growth.
• If you’re selling and buying another, keep your borrowing/life‑costs buffer strong — the next home you buy may not shoot up quickly.

📝 Final Thoughts

So, will UK house prices fall in the next five years?
– For the UK as a whole: unlikely in the base scenario. Most forecasts point to modest growth rather than a drop.
– But “unlikely” doesn’t mean “impossible.” Some regions, property types or price‑bands could face stagnation or small falls if conditions worsen.
– Regional differences will be significant.
– Affordability, interest rates, supply and economic growth remain key variables to watch.

If you’re buying or selling, treat this as a market where moderation is the watch‑word: neither a boom to expect nor a crash to assume — just careful planning and realistic expectations.