Savills predicts house prices in Britain to surge by £86,300 by 2029
- Savills has downgraded its forecast for house price growth in 2025 to 1.0%, previously estimated at 4.0%.
- In contrast, the five-year outlook has improved, now predicting a 24.5% increase in average house prices by 2029.
- The easing of mortgage regulations is expected to enhance transaction volumes and support house prices, particularly benefiting first-time buyers.
In 2025, amid global uncertainties, Savills updated its house price forecasts, adjusting expectations for the current year while boosting projections for the next five years. The firm anticipates average house prices in Britain to increase by only 1.0% this year, down from a prior estimate of 4.0%. However, it has increased its five-year growth forecast to 24.5%, citing easing mortgage regulations as a key factor in this more optimistic outlook. The anticipated easing of mortgage affordability tests allows potential buyers to borrow more, thereby making home ownership more accessible, particularly for first-time buyers. Despite these improvements, the first half of 2025 has been hampered by economic instability, with market activity complicated by buyer behavior in response to stamp duty changes that spurred a flurry of transactions at the year's outset. Consequently, Savills now expects the average house price to reach £448,600 by the end of 2029, a significant increase from the current average of £362,300 in mid-2025. Lucian Cook, head of residential research at Savills, noted the complexities introduced by geopolitical uncertainties that challenge predictions of future interest rate movements. The anticipated rise in both house prices and sales volumes will likely be influenced heavily by these new borrowing capabilities, which may motivate first-time buyers entering the market for the first time. As projected house sales in 2025 remain consistent at 1.04 million, Savills holds a positive outlook despite the slow start to the year, expecting strong demand to resume in early autumn, enhanced by a competitive mortgage landscape and potential base rate cuts.