UK House Prices Expected to Surge Over 23% by 2029, Forecast Shows:

Fuelled by ongoing yearly growth and improved housing affordability, Savills predicts that average UK property values will rise by £84,000 by 2029. The estate agency foresees house prices increasing by 4% next year, followed by 5.5% in 2026, and then 5%, 4% and 3% in the subsequent years, totalling a 23.4% rise. However, this outlook may vary for the ‘new build’ sector.

Savills also expects some current homeowners to delay moving until 2027, hoping for more stable interest rates, which could result in significant equity gains from property appreciation.

For first-time buyers, acting sooner may be beneficial, as waiting could mean facing higher prices. Nevertheless, market activity is likely to remain below pre-pandemic levels due to the lack of government support similar to ‘Help-To-Buy’.

For property investors, this forecast may signal promising opportunities, though timing and strategy could be crucial in maximising returns. The recent increase in the surcharge on second properties may also impact the buy-to-let market.

Regional differences:

Markets in the North, where mortgage holders face less financial strain, are expected to see the highest rate of house price growth, projected to reach between 28% and 29% by 2029. In particular, homeowners in the Northeast are expected to lead the UK in property value growth, with prices forecasted to rise by 29.4% by 2029. In the Northeast and Yorkshire, prices are expected to increase by 28.2% and 26.4%, respectively.

In contrast, the Southeast is anticipated to see a growth rate of 17.1%. As commuting becomes more common again, commuter hotspots supporting London’s market will continue to see growth into 2025. Beyond this, affordability is likely to become a key factor, with London and the Southeast facing higher borrowing demands relative to income.

With gradual improvement in affordability over the coming years, property price growth should gather momentum, though some challenges are likely to persist...