Mortgage price hikes this spring limited the chance of big property price rises throughout 2026, with experts forecasting they will rise by a rate slower than inflation or could even fall.
Increases to mortgage rates make borrowing money more expensive, which limits the size of the loans people are willing to take on. In turn, this can push down or curtail house price rises.
What do experts think will happen this year and next? Below, The i Paper runs through some expert forecasts.
The picture for 2026 – low growth or falls
Expert predictions for 2026 house prices broadly suggests they could fall – or grow by only tiny amounts.
The current level of inflation, measured by the consumer prices index (CPI), is 2.8 per cent, meaning that annually, the prices of goods and services rose by that amount in the past year.
But all the major forecasters that The i Paper spoke to expect less dramatic growth for the housing market.
Among those predicting rises is estate agency Hamptons – which forecasts 2.5 per cent growth across the year – although it hasn’t updated its official projections since mortgages started to rise in price in March.
Research director Aneisha Beveridge told The i Paper: “The direction of travel has become a little more uncertain.
“The recent uptick in mortgage rates, driven in part by global volatility following the war in the Middle East, has introduced some additional downside risk to house price growth this year.”
Since the start of the war in the Middle East, mortgage rates have shot up above 5.5 per cent on average, according to analytics firm Moneyfacts.
As of now, a two-year fixed-rate mortgage is 5.65 per cent whilst the five year mortgage is 5.61 per cent.
Beveridge added that despite mortgage rises, she did not expect price falls on average.
“We’ve been here before in terms of mortgage rates and don’t expect to see widespread house price falls across the country. The market has proved relatively resilient to higher rates over the past couple of years, with activity increasingly driven by needs-based buyers rather than discretionary moves,” she said.
However, other forecasters do expect to see a drop in prices.
Lucian Cook, director of residential research at estate agency Savills, said: “Despite a robust start to the year for both price growth and activity, the rise in mortgage rates since late February has downgraded the short-term outlook. Higher borrowing costs and weaker sentiment will weigh on demand through the remainder of 2026.
“At the same time, lower demand is being set against elevated levels of stock – partially from landlords selling up in the face of greater regulation, which will place downward pressure on prices, particularly across submarkets in London and the South East.”
Full forecasts for 2026 from multiple experts can be seen below.
What could happen to prices in 2027
Forecasters have tended to be more positive about the outlook for growth next year.
Broadly, forecasters expect interest rates to start to fall from their current rate of 3.75 per cent in 2027, providing that the war in the Middle East begins to ease. This would then lead to mortgage rates reducing.
Pantheon Macroeconomics for example is forecasting a 3 per cent rise in house prices next year.
“The housing market has proved remarkably resilient to persistently higher interestrates than before Covid, and has weathered a barrage of hits in recent years.
“Unemployment remains low, even if it has risen in the past couple of years. But house price inflation will remain sluggish until the [Bank of England] cuts rates in 2027,” explains Robert Wood, chief UK economist at Pantheon Macroeconomics.
Forecasters have however warned that predictions for the future are very uncertain.
Much depends on what happens in the Middle East, and how the UK government responds.
Tom Bill of Knight Frank, which is also currently predicting 3 per cent growth next year, says this is particularly hard to forecast at the moment because of the uncertainty over who will be UK Prime Minister later this year.
“Another longer-term risk is how the government responds to the economic shock, including the prospect of tax speculation ahead of the autumn Budget. This year, there is the added uncertainty of whether Rachel Reeves and Keir Starmer will be in Downing Street after the summer,” he said.
“Making predictions at the moment comes with a particularly long list of caveats,” he added.
Hence then, the article about what experts say will happen to house prices this year and in 2027 was published today ( ) and is available on inews ( Middle East ) The editorial team at PressBee has edited and verified it, and it may have been modified, fully republished, or quoted. You can read and follow the updates of this news or article from its original source.
Read More Details
Finally We wish PressBee provided you with enough information of ( What experts say will happen to house prices this year and in 2027 )
Also on site :