Forecast for United Kingdom (UK) house prices growth 2022-2027

Just as many other countries, United Kingdom's housing market grew substantially during the coronavirus pandemic, fueled by robust demand and low borrowing costs. Nevertheless, high inflation and the increase in mortgage rates has led to house price growth slowing down. According to the forecast, 2023 is expected to see house prices decrease by six percent. Between 2023 and 2027, the average house price growth is projected at 1.7 percent.

A contraction after a period of continuous growth

In June 2022, the UK's house price index exceeded 150 index points, meaning that since 2015 which was the base year for the index, house prices had increased by 50 percent. In just two years, between 2020 and 2022, the index surged by 30 index points. In June 2022, the average price for a house in the UK was about 292,000 British pounds. Just a year ago, the average home would sell for 254,000 British pounds.

Rents are expected to continue growing

According to another forecast, the prime residential market is also expected to see rental prices grow in the next years. Growth is forecast to be stronger in 2022 and slow down in the period between 2023 and 2026. The rental market in London is expected to follow a similar trend, with Central London slightly outperforming Greater London.