UK House Price Predictions For The Next 5 Years (2024)

What will happen to UK house prices in the next 5 years?

Many factors have been influencing the UK housing market and resulting in some volatile changes. There was a surge in house prices during the pandemic, and many potential homebuyers have actually postponed their plans to purchase a home. The cost of living crisis is also putting pressure on household budgets, which could make it more difficult for people to afford to buy a home. While the actual sale price of houses has remained fairly steady, inflation and higher mortgage interest rates have also made potential buyers much more cautious and less likely to commit to buying. This has had a modest effect on sale prices, as some sellers have reduced their asking prices to tempt buyers. The patient sellers however have stuck to their guns and still made sales, so it may be only motivated sellers having this issue.

Nationwide has published data showing that house prices in the UK have fallen by 1.1% over the past year. This is the first time house prices have dropped in the last 3 years. Nationwide has also predicted a 5% drop in house prices over the next 5 years. Savills also predicted a dip in house prices in 2023, although also anticipate a recovery by as soon as 2025. As the chart below shows, Savills does not predict a complete recovery for all areas, with the East and South East only reaching a 3% increase overall. London is even worse with a predicted reduction of -1.7%.

While the market is volatile and subject to a lot of external influences, there is unlikely to be a ‘crash’. The consensus among property experts is that there will be a slight drop in house prices, as we have already seen in some areas, but the market will recover fairly quickly. House price predictions for the next 5 years are that UK house prices will continue to rise overall in the next 5 years but at a slower rate than in recent years. The bubble is unlikely to burst, but it may bob along sedately for a while.

Have UK house prices fallen in 2023?

According to the Office for National Statistics, UK house prices rose by 1.7% from June 2022 to June 2023, when the average UK house was priced at £288,000. That’s a £5,000 jump from the previous year. But interestingly, it’s also £5,000 less than the highest price we saw in November 2022. However, this increase is not uniform in all areas of the UK – the North East saw prices rising by as much as 4.7%, while London prices actually went down by 0.6%. This is in line with Savills’ predictions that London will come out worse for housing prices compared with the rest of the UK. A slightly more modest growth than in recent years hardly constitutes a ‘crash’. London has had famously high house prices for some time, so with local government efforts like the Help to Buy scheme, the market has become a little more buyer-friendly.

How much will house prices go up in the next 5 years?

As mentioned earlier with regards to UK house price predictions for the next 5 years, Savills does predict an overall rise in house prices, despite a slight dip in 2023. This dip has not been nearly as severe as predictions from this time last year, so it is important not to take these forecasts as gospel, even those from experts. Interestingly, the Prime Capital Value Forecast from Savills shows even more robust growth in what they call the ‘prime market’, which comprises aspirational and desirable properties in the top 5% of the market by house price.

Should I buy a house now or wait?

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