New Forecast Expects UK House Prices to Lag Inflation Through 2027

The survey, conducted between 7 and 18 September, produced a median forecast for UK house-price growth of 1.3% in 2026, followed by 2.0% in 2027 and 3.3% in 2028.

The latest forecasts are weaker than those in the previous survey.

Why the forecast changed

Mortgage affordability remains a major factor.

The Bank of England has maintained Bank Rate at 3.75%, while concerns about inflation have increased following higher global energy costs.

Mortgage approvals have also been weak.

The Reuters report noted that approvals for house purchases were at their lowest level since January 2024 based on the latest available Bank of England data.

London faces a different outlook

The survey produced an especially cautious outlook for London.

Experts surveyed expected London property prices to decline by approximately 1.4% in 2026 before increasing 0.9% in 2027.

London's average property price has remained substantially higher than the national average, creating greater affordability pressure for buyers.

Rental growth remains stronger

The outlook for rents is different.

The Reuters survey expects UK rental prices to rise around 3% in both 2026 and 2027.

That reflects a combination of reduced rental supply and households remaining in the rental market because buying a home has become more difficult.

Forecasts are not guarantees

Property forecasts should be treated as scenarios rather than certainties.

Interest rates, inflation, employment, energy costs, government policy and consumer confidence can all change the trajectory of the housing market.

What the report tells us

The most important message is that the UK property market may be entering a period where nominal house-price growth is relatively modest while rental costs continue to rise more quickly.

That distinction will be important for homeowners, renters and investors during the remainder of 2026 and into 2027.