House price growth is expected to remain subdued over the next three years, with higher mortgage costs continuing to restrict buyer demand and property sales. Connells Group forecasts average house prices across Great Britain will rise by just 1% in 2026, followed by 1.5% in 2027. Growth could strengthen to 2.5% in 2028 before easing to 2% in 2029.
Higher mortgage rates have already reduced Connells' original forecast for 2026 transactions by around 100,000. The average mortgage rate paid by homebuyers has increased from 4.14% at the start of 2026 to 5.22% in October. Monthly repayments on a typical property with a 75% mortgage over 25 years have reached £1,224, compared to £1,115 a year earlier.
London's housing market is expected to recover next year after a difficult period, with a forecast 1% fall in house prices during 2026, followed by 2% growth in 2027. Outer London could outperform, with prices rising by 3% next year after a forecast 0.5% decline in 2026. Inner London faces a weaker recovery, with prices expected to rise by just 0.5% in 2027, following a projected 4.5% fall this year.
More affordable regions, such as the North East and Scotland, are forecast to deliver stronger price growth. Connells expects house prices in both regions to rise by 4% in 2028. The North East is forecast to record growth of 3% this year and 2.5% in 2027, while Scotland is expected to achieve 2.5% growth in both years. By contrast, prices in the South East are forecast to remain unchanged in 2026 and rise by just 1% next year.
Housing transactions are expected to begin recovering next year as mortgage affordability improves, with Connells forecasting around 1.1 million completed sales across Great Britain in 2027. This figure could increase to almost 1.2 million in 2028 before falling back to approximately 1.1 million in 2029.