UK Housing Market Recovery Not Expected Until 2028, Savills Says

Britain's housing market faces a prolonged downturn, with a full recovery not anticipated until 2028, according to a forecast from property consultancy Savills. The firm cited persistently elevated mortgage rates — linked in part to economic uncertainty stemming from the ongoing Middle East conflict — as a primary drag on buyer demand and property valuations.

Savills projected that average house prices would continue drifting downward through the remainder of 2026 before declining 1.5% in 2027. The forecast underscores how geopolitical instability, beyond domestic monetary policy decisions, is increasingly shaping conditions in one of the world's most closely watched residential property markets.

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Higher borrowing costs have squeezed affordability for prospective buyers, dampening transaction volumes and removing upward pressure on prices. Savills indicated that sustained conflict in the Middle East is contributing to a risk environment that keeps lenders cautious and market participants hesitant, compounding the slowdown that has gripped British housing since interest rates began rising sharply in recent years.

The extended timeline to recovery signals that homeowners, developers, and investors may need to recalibrate expectations well into the latter half of this decade. Analysts note that any meaningful rebound will likely hinge on a combination of falling mortgage rates, restored consumer confidence, and geopolitical stabilization — factors that remain difficult to predict with precision.

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