· UK house prices
Savills forecasts a softer London housing market in 2027
Savills projects a 3.5% fall in mainstream London house prices in 2027 and a 1.5% decline across the UK. Its forecast puts the start of a sustained recovery in 2028.
The change in the forecast
Savills moved its expected UK recovery back to 2028 in a forecast published on 4 November. The firm sees higher borrowing costs and weaker confidence weighing on demand through 2027. Its model assumes mortgage affordability improves from 2028, with UK prices rising by 3.5% that year and growth gathering pace in the second half.
The London path is more subdued. Savills forecasts mainstream prices to rise by 2% in 2028 after the projected 2027 fall, with an 8.1% cumulative rise over the five years to 2031, against 15.8% nationally. The five-year figures include the forecast decline and compound the subsequent gains.
London is a collection of local markets
The forecast covers the mainstream market. Savills models prime London separately, and the distinction matters in a city where a family house, a leasehold flat and a scarce prime address can attract quite different buyers. Rates influence each buyer’s budget, while service charges, lease length, condition and supply on the immediate street can have more bearing on the price of a particular home.
A lower forecast can make a cautious buyer more willing to negotiate. The real evidence is the price of comparable homes that have sold, alongside the choices available now. Asking prices show the competition a seller faces. Recent transactions and credible offers show where buyers have been willing to commit.
Planning around the range
For a buyer, a sensible comparison includes monthly repayments, the cost of any work and how long the property is likely to serve their needs. That makes it easier to see whether a discount on the asking price makes up for an expensive mortgage or a substantial refurbishment.
Sellers with a fixed moving date have reason to review local evidence early. Those with more time can test the market against a realistic asking price and review the response after a set period. Savills’ projections offer a baseline for those decisions. The timing of any recovery will depend in part on how borrowing costs actually evolve.
