Average UK house price growth is expected to slow to 14 per cent over the next five years, but there will be marked differences between and within regions.  

We are expecting the North West to show the strongest five-year price rises at 18 per cent, with London likely to see the slowest at just 7 per cent. Price growth of almost 70 per cent over the past 10 years, some 3.4 times the UK average, has left house prices in the capital pushing up against the limits of affordability. Prime central London, however, has a different set of drivers from the mainstream, and is expected to see values rise by around 20 per cent by the end of 2022. 

Across the UK in general, price growth is expected to slow next year as uncertainty weighs on sentiment. Then, assuming employment, wage and GDP growth swing back towards trend levels, there’ll be more potential for price growth from 2020, though this will be tempered by interest rate rises.  

Our forecasts assume that the Bank of England base rate will reach 2.25 per cent by the end of our forecast period, with the average mortgage interest rate rising to 4 per cent. And as rates rise, mortgage regulation, introduced in 2014, will be more keenly felt. By restricting the amount people can borrow, it will limit price growth, but also reduce risk now and in the future. 

Beyond London and its hinterland, house prices have risen more in line with incomes, leaving affordability far less stretched. While the average house price in London is now almost 13 times the average income, in the North West it is a much more modest 5.6. Coupled with a robust economic outlook and strong employment growth centred on Manchester, this will underpin the region’s housing market. 

Our interactive map below shows the predicted mainstream trends over the next five years by region, underlining the diverse nature of the UK housing market.  Click on your region to see the current average house price and expected five-year house price growth. This information is expressed as a regional average and there will obviously be marked differences both between and within regions. 

Further information

Learn more about Savills forecasts