UK house prices forecast to rise 24.5% by 2029

The UK’s housing market is poised for growth, with average house prices expected to climb by 24.5% over the next five years, a forecast from Savills reveals.

The rise could add around £86,300 to the typical property value by 2029.

Despite a sluggish start to 2025, the real estate firm has revised its projections which highlight a robust medium-term outlook.

That will be driven by relaxed mortgage affordability rules and anticipated interest rate reductions.

This year’s predicted growth is now expected to be just 1%, down from an earlier prediction of 4%.

Savills points to a cautious market influenced by geopolitical tensions and economic uncertainties for the revised figure.

Predicting house prices ‘challenging’

The firm’s head of residential research, Lucian Cook, said: “Interest rates have fallen as expected, giving buyers a bit more financial capacity than they had a year ago.

“But a lot has changed over the last six months.

“Greater geopolitical uncertainty – including tariffs and trade wars – has made predicting the precise path of further cuts more challenging.”

The first half of 2025 saw a dip in buyer activity, with annual price growth slowing to 2.1% by June, compared to 4.7% in December 2024, according to Nationwide.

Mr Cook added: “In light of this and the potential for more buyer uncertainty in the run up to the Autumn Budget, we have revised our house price forecast for this year.”

Flexible affordability stress tests

From 2026, Savills anticipates stronger growth, with annual increases of 4% next year, 6% in 2027 and 2028, and 5.5% in 2029.

This trajectory is boosted by recent changes in mortgage regulations, allowing greater flexibility in affordability stress tests and higher loan-to-income ratios.

Mr Cook said: “Recent easing of mortgage regulations, including more flexibility on affordability stress tests and higher allowances for loans above 4.5 times income, is likely to boost transaction volumes, particularly by helping more first-time buyers get on the ladder.”

Regional house price rises

Regional variations reveal the North West leading with a projected 31.2% growth by 2029, followed by Scotland at 29.4% and Wales at 28.2%.

London, however, is expected to see more modest gains at 15.3%, reflecting its sensitivity to tax concerns and economic shifts.

The East of England and East Midlands are forecast to experience slight declines in 2025, at -1.0%, before rebounding.