Connells predicts small house price rise next year

House prices are expected to rise by just 1.5% next year, but will pick up as borrowing costs ease in 2028, according to Connells.

The group says prices in Britain are expected to rise 1% this year, 1.5% in 2027, 2.5% in 2028 and 2% in 2029.

It says high mortgage rates delayed the recovery in home moves this year, with 100,000 fewer transactions than anticipated.

Lower mortgage rates should help households resume postponed moves from 2027, Connells says.

The pick-up in home moves many expected this year hasn’t materialised.”

Aneisha Beveridge, Research Director at Connells Group (pictured), says: “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.

“Looking ahead, lower mortgage rates should gradually give more people the confidence and financial room to move. But if rates remain around 5%, the risk of small house price falls in 2027, rather than growth, increases significantly.”

Uncertainty

House price growth is forecast to ease to 2% in 2029 as uncertainty ahead of the next General Election weakens demand, Connells says.

Prices are expected to peak at 2.5% across Britain in 2028, as falling inflation creates scope for borrowing costs to ease and support an improvement in demand.

In London, house prices are forecast to rise by 2% next year, following a 1% fall in 2026.

Scotland and the North East are forecast to remain among the strongest performers.

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