Five-Year Forecast from Savills
Savills has published its latest mainstream residential property forecast, providing an outlook for the UK housing market over the next five years. The UK Property Review offers useful insight into expected price movements and market activity.
The report suggests that house price growth will remain subdued in the short term, with prices forecast to rise by 1.0% in 2025 and 2.0% in 2026. This slower growth reflects ongoing market pressures, including high property supply and weaker buyer demand. However, Savills expects market conditions to improve in the years that follow, provided interest rates decline as anticipated and the wider UK economy stabilises.
Transaction volumes are also forecast to recover, gradually returning to levels seen before the pandemic as affordability improves. From 2027 onwards, annual price growth is expected to accelerate, reaching a peak of 5.0% in 2028 and 5.5% in 2029. Across the full five-year period, Savills predicts total house price growth of 22.2%, equating to an average increase of nearly £80,000.
Improving Sentiment in the UK Housing Market
Recent data indicates that the UK housing market may be slowly regaining momentum.
Nationwide’s latest figures show modest price growth in October, with annual house prices rising by 2.4%, up from 2.2% in September. This suggests a gradual improvement in market confidence.
Data from the Bank of England further supports this positive trend. In September, net borrowing increased by £1.2 billion to £5.5 billion, marking the highest monthly rise since March. Net mortgage lending rose by 3.2% year-on-year, the strongest annual growth since January 2023. In addition, net mortgage approvals climbed to 65,900, signalling improving borrowing activity.
Commenting on the outlook, Nationwide’s Chief Economist Robert Gardner said that housing affordability could improve modestly if income growth continues to outpace house price growth. He also noted that borrowing costs may ease further if the Bank Rate is reduced again in the coming months.
Property Transactions Showing Growth
The latest HMRC data for September highlights a rise in UK residential property transactions.
On a seasonally adjusted basis, transactions reached 95,980 in September 2025, reflecting a 4% increase year-on-year and a 1% rise compared with the previous month. Non-seasonally adjusted figures show 102,420 transactions, an 8% increase compared with September 2024, though 2% lower than August 2025. These figures suggest a steady recovery in activity following the slowdown seen earlier in the year after Stamp Duty changes.
Jason Tebb, President of OnTheMarket, commented that the increase in transaction volumes shows the market is continuing to move in a positive direction. While wider economic and political uncertainty remains, he noted that the housing market has demonstrated strong resilience, with many buyers continuing to proceed despite pre-Budget speculation around potential tax changes.
Read the full review here.
All information is correct at the time of writing (19 November 2025).
This document is for general information only and does not constitute personalised financial or investment advice. Professional advice should be sought before making any financial decisions. Information is based on current understanding and may change without notice. Accuracy and completeness cannot be guaranteed, and no liability is accepted for errors or omissions. Tax rules and reliefs are subject to change and depend on individual circumstances. No part of this document may be reproduced without prior permission.