Will UK House Prices Fall? Is 2026 a Good Time to Buy?
Written by: Marcus M. Araz, MBA, PhD · Updated:
Nationally, prices are not falling but slowing; the fall is in London. According to the Office for National Statistics (ONS), the average UK house price was £273,000 in July 2026, up 1.4% in a year, while London fell 3.3%. Savills expects 2026 to end with a slight 2% fall, a recovery from 2027 and total growth of 18.5% by 2030. Rents rose 3.8% in a year. So 2026 is a weak year for short-term capital growth but a year of strong negotiating power for rental income and the long term.
Prices and outlook by region
The UK is not one market; the gap between the north and London widened further in 2026.
| Area | Price, last 12 months (ONS, July 2026) | Savills forecast, total 2026 to 2030 |
|---|---|---|
| UK average | up 1.4% | up 18.5% |
| London | down 3.3% | up 10.6% |
| North West (Manchester, Liverpool) | up 4.4% | up 25% |
| Yorkshire (Leeds) | up 3.0% | up 25% |
| North East | up 4.9% | not stated |
| West Midlands (Birmingham) | up 1.5% | not stated |
Savills’ reasoning is simple: when rates are high, more affordable regions hold up better. In the north the gap between rent and mortgage payments is more comfortable; in London high entry prices mean higher rates hit demand harder.
What will drive prices: interest rates
On 16 September 2026 the Bank of England held Bank Rate at 3.75%. Three of the nine members voted to raise it; inflation rose to 3.1% in August and the conflict in the Middle East is keeping energy prices high. This makes a significant fall in borrowing costs unlikely in the short term. The next rate decision will be announced on 5 November 2026.
As long as rates stay high, the number of mortgage buyers stays limited, which holds prices down. For an investor buying with cash or a small loan, that means negotiating power.
Why rents keep rising
According to the ONS, the average UK rent was £1,400 a month in August 2026, up 3.8% in a year, and up 5.8% in the North West. The gap between rents and prices is widening for two reasons: with borrowing expensive, more households rent instead of buying, and some small landlords are leaving the market because of tax and tenancy law changes. The result: a flat bought today earns a higher rental yield than a few years ago.
Buy now or wait?
- If you are buying for rental income, waiting pays little: rents keep rising, and a possible small price fall usually does not make up for the rent you miss while waiting.
- If you are buying for capital growth, choosing the region matters more than timing: Savills expects growth in the north to be more than double London’s.
- If you are buying in London, 2026 is a year to negotiate: incentives such as price cuts, service charge holidays or stamp duty contributions are common.
- If you are buying with a mortgage, work out the payments at today’s rate; a budget that relies on rates falling is risky.
City by city detail: London, Manchester, Liverpool, Birmingham and Cambridge.
Who it suits and who it does not
Suits
- Buyers buying for rental income who will hold for at least 7 to 10 years
- Those buying with cash or a small loan who want to use today’s negotiating climate
- Investors looking for yield and growth together in northern cities
Does not suit
- Anyone planning to sell at a profit within two or three years: purchase costs and today’s price trend do not allow it
- Anyone whose budget assumes rates will fall quickly
- Anyone hoping to gain residency by buying: buying a home in the UK does not give residence rights
Frequently asked questions
Will UK house prices fall in 2026? No big national fall is expected. According to the ONS, prices rose 1.4% in the year to July 2026; Savills expects the year to end with a slight 2% fall. The fall is clear in London: 3.3% over the year.
Will UK house prices rise in 2027? According to Savills’ June 2026 forecast, prices are expected to rise 2.5% in 2027 and 5% to 6% a year after that, 18.5% in total by 2030.
Will house prices in London fall? London prices fell 3.3% in a year, and Savills expects only 10.6% growth in London by 2030. Rents rose 3.5%, so in London yields are rising while capital growth is slow.
Which UK region will see the biggest price rises? According to Savills, the North West (Manchester, Liverpool) and Yorkshire are expected to rise about 25% by 2030, more than double London.
Will house prices rise if rates fall? Lower rates would boost mortgage demand and support prices. But in September 2026 three members of the Bank of England’s committee voted for a rise and inflation is 3.1%; expecting quick rate cuts in the near term is not realistic.
Is now the right time to buy in the UK? For rental income and the long term, yes: buyers have strong negotiating power and rents are rising. For short-term capital growth, no.
Sources
Price and rent figures are taken from the ONS Private rent and house prices, UK: September 2026 bulletin and ONS local housing price data. For the rate decision see the Bank of England, September 2026. Forecasts are from Savills’ five-year forecast published on 1 June 2026 (PropertyWire). Forecasts are not guarantees.
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capital.works® (YATIRIM UK LIMITED) is a real estate advisory company; it does not provide legal or tax advice. The title and contract process is carried out by a solicitor registered in the UK. On the mortgage side, our FCA authorisation applies (FRN 1049015, authorised credit broker).
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