UK house prices forecast to fall 1.5% in 2027, says Savills
Savills expects average mainstream UK house prices to fall by a further 1.5% in 2027. The property firm links its forecast to the prolonged Middle East conflict, weaker sentiment and mortgage rates staying higher for longer.
By Eleanor Whitcombe, Housing Market CorrespondentPublished 
Key facts
- Savills forecasts a further 1.5% fall in average mainstream UK house prices in 2027.
- Savills says the prolonged Middle East conflict is weighing on sentiment and keeping mortgage rates higher for longer.
- HM Land Registry recorded an average UK house price of £273,000 in August 2026, up 0.9% annually.
- Bank of England figures showed house-purchase mortgage approvals fell to 53,400 in September 2026.
Property firm Savills forecasts that average mainstream UK house prices will fall by a further 1.5% in 2027. The projection covers the UK market and is a forecast, not a recorded change in property values.
What does the UK house prices forecast cover?
Savills describes its projection as applying to average mainstream prices. That distinction matters for homeowners and buyers: a national average does not establish how much any individual property will gain or lose in value.
The firm's short announcement does not provide a regional breakdown or separate figures for different property types. It therefore offers a headline view of the market rather than a local price assessment.
Slower price growth and fewer purchase approvals
The forecast follows a slowdown in measured annual price growth. According to HM Land Registry, the average UK house price reached £273,000 in August 2026, with annual growth of 0.9%. Growth eased from July, while London recorded price falls.
Mortgage activity also weakened on one measure. Bank of England figures showed house-purchase mortgage approvals fell to 53,400 in September 2026, while approvals for remortgaging with a different lender increased. Those figures distinguish borrowing associated with home purchases from activity among existing borrowers changing lenders.
Why Savills expects prices to weaken
Savills attributes its outlook to the prolonged conflict in the Middle East. In the firm's assessment, the conflict is affecting confidence while keeping mortgage rates elevated for longer, putting pressure on the housing market through both sentiment and borrowing costs.
This is Savills' explanation for its forecast, rather than a confirmed account of how prices will behave in 2027. Its announcement does not quantify the separate effects of confidence and mortgage costs, or specify a mortgage rate assumption against which readers can assess the projection.
What is known about the outlook beyond 2027?
The brief Savills announcement does not identify a year in which house price growth is expected to resume. It also gives no timetable for mortgage rates to fall, leaving the timing and scale of any subsequent recovery unspecified in the published extract.
Questions and answers
- Will UK house prices fall in 2027?
- Savills forecasts that average mainstream UK house prices will fall by a further 1.5% in 2027. This is a prediction, not a confirmed outcome.
- Why does Savills expect house prices to fall?
- Savills links its forecast to the prolonged Middle East conflict, which it says is weakening sentiment and keeping mortgage rates higher for longer.
- Does the Savills forecast cover the whole UK?
- The headline forecast covers average mainstream UK house prices. The short announcement does not provide regional figures or separate projections for different property types.
- Does a 1.5% forecast fall mean every home will lose value?
- No. Savills' figure is a forecast for the national mainstream average, not a valuation or price prediction for an individual property.
- What was the average UK house price in August 2026?
- According to HM Land Registry, the average UK house price was £273,000 in August 2026, with annual growth of 0.9%.
- When does Savills expect house prices to recover?
- The brief Savills announcement supplied for this report does not specify when house price growth is expected to resume.
Why this matters
For buyers and homeowners, Savills' forecast highlights the distinction between property prices and the cost of borrowing. Its expectation of lower average prices in 2027 sits alongside an assessment that mortgage rates will remain higher for longer, so a forecast price fall alone does not establish how purchase costs will change. The national projection also leaves local outcomes unresolved: the short announcement gives no regional or property-type breakdown.
Sources
This article is checked against its sources under our editorial policy. It is general information only and is not financial or mortgage advice. See our corrections policy to report an error.
