House prices set to fall until 2028, with London hit hardest

House prices are not expected to recover from the UK’s property market slump until the second half of 2028, with London set to be the country’s worst-hit region. The average house price in the UK is set to fall by a further 1.5 per cent in 2027, according to new research from estate agency Savills, before recovering only in the second half of the following year. The soaring mortgage rates caused by the war in Iran have put pressure on house prices, as prospective home buyers hold off on moving amid fears that inflation will continue to climb. Emily Williams, director of residential research at Savills, said: “The drawn-out conflict in the Middle East has pushed back the prospect of meaningful mortgage-rate relief, which will weigh on buyer sentiment and affordability. We expect this will suppress activity and put pressure on prices next year.” House prices are expected to recover over the next half-decade, putting on 15.8 per cent by 2031, exceeding income growth of 14.4