House prices across Britain are expected to rise by 1.5% in 2027, with modest growth continuing through 2029, according to forecasts from Connells Group.
The estate agency network projects prices will increase by 1% in 2026, followed by 1.5% in 2027, 2.5% in 2028, and 2% in 2029. The projections come as mortgage rates continue to impact market activity, with transactions falling approximately 100,000 below initial expectations for 2026.
Transaction volumes below expectations
Aneisha Beveridge, Research Director at Connells Group, stated: “The pick-up in home moves many expected this year hasn’t materialised. Instead, transactions have fallen as higher mortgage rates squeezed buyers’ budgets and dented confidence, leaving activity around 100,000 below our expectations at the start of 2026.”
The group attributes the delayed recovery in home moves to elevated mortgage rates, which have constrained buyer affordability and market confidence throughout 2026.
Regional variations expected
London is forecast to see a 2% price increase in 2027, following a 1% decline in 2026. Scotland and the North East are expected to remain among the strongest performing regions during the forecast period.
Beveridge added: “Looking ahead, lower mortgage rates should gradually give more people the confidence and financial room to move. But if rates remain around 5%, the risk of small house price falls in 2027, rather than growth, increases significantly.”
Peak growth anticipated in 2028
Connells forecasts house price growth will peak at 2.5% across Britain in 2028, as declining inflation creates scope for borrowing costs to ease. The projection assumes improving demand conditions as mortgage affordability gradually improves.
Growth is expected to moderate to 2% in 2029, with uncertainty ahead of the next General Election anticipated to weaken demand during that period.
The forecast underscores the continued sensitivity of the UK housing market to mortgage rate movements, with transaction volumes and price growth heavily dependent on the trajectory of borrowing costs over the coming years.
