Savills, the international property consultancy, has warned that Britain’s housing market is unlikely to stage a recovery before 2028 as higher borrowing costs and subdued buyer demand persist.
The firm said average house prices would continue to drift lower during the remainder of 2026 and are forecast to fall by 1.5% in 2027. Savills attributed the weaker outlook to mortgage rates staying higher for longer, a dynamic it links to uncertainty stemming from the war in the Middle East.
Impact on buyers and prices
According to Savills, the prolonged conflict has undermined buyer confidence and is expected to keep mortgage rates elevated, deterring some prospective purchasers and weighing on transaction volumes and prices. The consultancy’s outlook implies a drawn-out period of adjustment for the UK housing market rather than a swift rebound.
Market implications
The forecast from Savills suggests real estate activity may remain muted through 2026 and into 2027, with any sustained recovery pushed back until 2028. The firm’s assessment highlights the sensitivity of the housing market to global geopolitical developments that can influence domestic borrowing costs and consumer sentiment.