Relevant insights
Residential Property Review
November 2025
Blog
Five-year forecast from Savills
Savills has released its latest mainstream residential forecast, outlining what to expect from the housing market over the next five years. The UK Property Review offers valuable insights into these trends.
According to the report, house price growth is expected to be relatively slow over the next year, with projected increases of 1.0% in 2025 and 2.0% in 2026. This subdued pace is due to ongoing market challenges, including high levels of supply and muted buyer demand. However, Savills anticipates that conditions will improve in subsequent years if interest rates go down as expected and the UK economy stabilises. Transaction volumes are also expected to recover, returning close to pre-pandemic levels as affordability gradually improves.
Annual growth is forecast to accelerate sharply after 2026, peaking in 2028 and 2029 at rates of 5.0% and 5.5% respectively. Over the full five-year period, prices are expected to grow by a total of 22.2%, which is equivalent to an average increase of almost £80,000.
Positivity in the UK housing market
Recent reports suggest that the UK housing market could be on the slow road to recovery.
The latest data from Nationwide shows that there was modest house price growth in October, with an annual rise of 2.4%. This is slightly up from September, when prices rose by 2.2% annually.
Recent figures from the Bank of England support this optimism. In September, net borrowing increased by £1.2bn to £5.5bn, the highest monthly rise since March this year. Net mortgage lending increased by 3.2% year-on-year, the fastest rate of annual growth since January 2023. Also, net mortgage approvals rose to 65,900, a promising sign for future borrowing.
Robert Gardner at Nationwide commented, “Looking forward, housing affordability is likely to improve modestly if income growth continues to outpace house price growth as we expect. Borrowing costs are also likely to moderate a little further if Bank Rate is lowered again in the coming quarters.”
Property transactions on the rise
Latest figures for UK property transactions in September, released by HMRC, show an improvement in the number of UK residential property transactions.
The seasonally adjusted figure for September 2025 stands at 95,980 sales, representing a 4% annual increase and a 1% monthly rise. On a non-seasonally adjusted basis, there were 102,420 transactions recorded, which is 8% higher than September 2024 and 2% lower than August 2025. These figures indicate that activity in the housing market is steadily recovering after the slowdown seen in April, following the Stamp Duty reforms.
President of OnTheMarket, Jason Tebb, commented on the findings, “The uptick in seasonally adjusted transaction numbers indicates that the market continues to move in the right direction. The market remains remarkably resilient despite wider economic and political concerns.” He added, “Pre-Budget speculation over tax changes is creating some uncertainty, although many are proceeding with transactions regardless.”