Connells Group has issued a series of forecasts for the housing market for 2027 and beyond – the first major agency group to reveal projections for the next 12 months and more.
It says:
- House prices across Britain to rise by 1.0% in 2026; then 1.5% in 2027; then 2.5% in 2028; and 2.0% in 2029, as borrowing costs ease;
2026 will see an estimated 100,000 fewer transactions than anticipated at the start of the year; - Lower mortgage rates should help households resume postponed moves from 2027 onwards, but borrowing costs are expected to remain above the levels seen for much of the 2010s, limiting the pace of price growth;
- London house prices are forecast to rise by 2.0% in 2027, following a 1.0% fall in 2026. Outer London should benefit from improving mortgage affordability, but higher taxation and weaker investor and international demand are expected to limit the capital’s recovery;
- Price growth is expected to peak at 2.5% across Great Britain and London in 2028, as falling inflation creates scope for borrowing costs to ease and support a broader improvement in demand;
- Scotland and the North East are forecast to remain among the strongest performers. More limited house price growth since 2008 has left these markets comparatively affordable, giving buyers more room to respond as mortgage rates fall;
- House price growth is forecast to ease to 2.0% in 2029 as uncertainty ahead of the next general election tempers demand, particularly in London and Southern England where buyers are more exposed to potential property tax changes;
- Home moves are expected to begin recovering in 2027 as lower mortgage rates bring some postponed buyers back to the market, with completions reaching around 1.1 million in 2027, before rising further to just under 1.2 million in 2028. Activity is forecast to ease back to 1.1 million in 2029, set to be an election year
Aneisha Beveridge, research director at Connells Group, adds: “The pick-up in home moves many expected this year hasn’t materialised.
“Instead, transactions have fallen as higher mortgage rates squeezed buyers’ budgets and dented confidence, leaving activity around 100,000 below our expectations at the start of 2026.
“But fewer moves have not translated into widespread price falls. Wage growth has helped support household affordability, while inflation has done much of the heavy lifting by reducing house prices in real terms.
“Looking ahead, lower mortgage rates should gradually give more people the confidence and financial room to move. But if rates remain around 5%, the risk of small house price falls in 2027, rather than growth, increases significantly.
“By mid-2027, the final wave of households on cheap five-year fixes taken out before rates began to rise will be refinancing. Higher repayments will still stretch budgets, but the refinancing shock that has weighed on confidence and activity should start to fade.
“We expect house price growth to build in 2027 and 2028, although mortgage repayments and moving costs will continue to hold some households back.
“London should return to growth, particularly in Outer London, but higher taxes and weaker investor and international demand will constrain its recovery. More affordable markets, including Scotland and the North East, are better placed to lead price growth.
“Government policy has supported first-time buyers and the lower end of the market, while stamp duty and other tax barriers will continue to weigh on the mainstream and prime markets.”
SOURCE: https://www.estateagenttoday.co.uk/breaking-news/2026/11/first-2027-housing-market-forecast-just-released/
