Landlords hoping that capital appreciation may compensate for suppressed rents in the coming years will be disappointed.

Connells Group, the UK’s largest estate and lettings agency conglomerate, has issued a series of forecasts for the housing market for 2027 and beyond.

It says:

• House prices across Britain to rise by 1.0% in 2026; then 1.5% in 2027; then 2.5% in 2028; and 2.0% in 2029, as borrowing costs ease; 
• 2026 will see an estimated 100,000 fewer transactions than anticipated at the start of the year; 
•  Lower mortgage rates should help households resume postponed moves from 2027 onwards, but borrowing costs are expected to remain above the levels seen for much of the 2010s, limiting the pace of price growth;
• London house prices are forecast to rise by 2.0% in 2027, following a 1.0% fall in 2026. Outer London should benefit from improving mortgage affordability, but higher taxation and weaker investor and international demand are expected to limit the capital’s recovery;
• Price growth is expected to peak at 2.5% across Great Britain and London in 2028, as falling inflation creates scope for borrowing costs to ease and support a broader improvement in demand;
• Scotland and the North East are forecast to remain among the strongest performers. More limited house price growth since 2008 has left these markets comparatively affordable, giving buyers more room to respond as mortgage rates fall;
• House price growth is forecast to ease to 2.0% in 2029 as uncertainty ahead of the next general election tempers demand, particularly in London and Southern England where buyers are more exposed to potential property tax changes;
• Home moves are expected to begin recovering in 2027 as lower mortgage rates bring some postponed buyers back to the market, with completions reaching around 1.1 million in 2027, before rising further to just under 1.2 million in 2028.  Activity is forecast to ease back to 1.1 million in 2029, set to be an election year.

Aneisha Beveridge, research director at Connells Group, adds: “The pick-up in home moves many expected this year hasn’t materialised.  

“Instead, transactions have fallen as higher mortgage rates squeezed buyers’ budgets and dented confidence, leaving activity around 100,000 below our expectations at the start of 2026.  

“But fewer moves have not translated into widespread price falls.  Wage growth has helped support household affordability, while inflation has done much of the heavy lifting by reducing house prices in real terms”

Connells Group has so far made no forecasts for rents in 2027 and beyond