Shocking Prediction: UK House Prices Soar to Over £300K by 2028!

Discover the shocking prediction by renowned estate agent Savills, who forecasts that UK house prices will soar to over £300K by 2028. Prepare for the future of the housing market with this eye-opening revelation.

With the ever-changing landscape of the UK housing market, it can be challenging to keep up with the latest trends and forecasts. Here is in-depth analysis of the current situation and shed light on what the future holds for UK house prices.

According to research conducted by Savills, a renowned estate agent, UK house prices are expected to experience a modest decline of 3 per cent in the coming year, indicating a stabilization in the market. This decrease is seen as the market reaching its "bottom out" point, signaling a turning point for house prices.

However, the news isn't all doom and gloom. Savills also predicts that average property prices will witness a gradual rise in the years to come. In 2025, the average property price is projected to increase by 3.5 per cent to £255,593, with subsequent climbs of 5 per cent in 2026 and 6.5 per cent in 2027. Over the next five years, UK house prices are anticipated to rise by an impressive 17.9 per cent, amounting to £45,521. By 2028, the average UK property price is expected to reach £300,108.

It is important to note that these projections are based on various factors and market conditions. While there are no guarantees in the fluctuating world of real estate, Savills' extensive research provides valuable insights into potential future developments.

Regional Trends: Wales and the North East Take the Lead

Interestingly, Wales and the North East of England are predicted to experience the most substantial house price growth over the next five years, with both regions potentially seeing increases of over 20 per cent. This bucks the conventional trend of London dominating the market, although the capital is still expected to witness a respectable growth rate of 13.9 per cent in the same period.

According to Savills, London's house prices in certain exclusive areas like Kensington and Chelsea or Knightsbridge may witness a slight dip of 2 per cent in the upcoming year. This is attributed to an increased dependency on mortgages in these high-end neighborhoods. However, the overall outlook for prime residential real estate prices across the rest of the UK is a more modest decline of 1.5 per cent.

Cash Buyers Prevail in a Competitive Market

Amidst a challenging market, cash buyers have remained the most resilient group, with activity levels actually increasing by 3.5 per cent compared to previous years. This underscores their continued influence and resilience within the real estate industry.

However, a decrease in activity among mortgaged buyers, especially buy-to-let investors, has impacted overall transaction numbers. It is estimated that by the end of this year, transactions will be 20 per cent lower than in 2022. These fluctuations in buyer activity highlight the importance of a careful examination of market dynamics and trends when evaluating future developments.

Mortgaged Buyers Return to the Market, Driving Transactions

Savills predicts that property transactions will remain at around 1 million in 2024 but will gradually increase to 1.16 million by the end of 2028 as mortgaged buyers return to the market. This anticipated increase is indicative of the market's resilience and gradual recovery.

Cost pressures and higher mortgage rates have exerted pressure on the housing market this year. However, analysts at Savills anticipate a decline in borrowing costs in the second half of 2024, providing a much-needed respite. The recent decision by the Bank of England to maintain interest rates at 5.25 per cent offers borrowers on tracker and variable rates some breathing space.

Having said that, an estimated 1.6 million mortgage borrowers are expected to transition from fixed-rate mortgages next year, many of whom are currently benefiting from rates below 2 per cent. Savills experts predict that UK interest rates will be cut to 4.75 per cent by the end of 2023, mitigating the impact of these transitions and supporting a smoother market.

Positive Signals: A Steady Recovery

Recent figures from Halifax indicate a welcome turn for the UK housing market. House prices registered a notable rise of 1.1 per cent in October, breaking a six-month streak of declines. This optimistic signal further strengthens the notion that the market is gradually rebounding.

While the road to recovery may present its own challenges, the cautious optimism provided by Savills' research and other market indicators cultivates hope for future stability and growth.

In conclusion, the UK housing market is poised for a turnaround, as indicated by the forecast provided by Savills. Although short-term challenges are expected, the long-term trajectory suggests a steady rise in house prices over the next five years. Regional variations emphasize the changing dynamics across the country, with Wales and the North East showing remarkable growth potential.

It is important to remember that various factors influence the housing market, and these projections are not immune to the inherent volatility of the sector. Nevertheless, Savills' research offers valuable insights to navigate the ever-evolving real estate landscape.