UK property in 2027 and 2028

There is a temptation in property to ask one question above all others: where will prices be in two years? It is an understandable question, but not the one on which I would want to base a development decision. The more useful question is what sort of homes people will want, what they can afford and which locations will continue to work when confidence is less certain.

As we approach 2027, the evidence points to a market that is neither uniformly weak nor ready for a simple nationwide rebound. It is more selective. Mortgage costs, local supply, the type of property and the quality of its surroundings matter enormously. That makes careful analysis more important than a headline prediction.

The starting position

Official figures released in October show average UK house prices up just 0.9% in the year to August 2026. In London, prices fell 2.2%, with flats down 5.0%. In contrast, average private rents rose 3.8% across the UK in the year to September. This combination reflects an uncomfortable reality: pressure on housing need does not automatically translate into buyers being able or willing to pay higher purchase prices. [1]

The Royal Institution of Chartered Surveyors reported a September net balance of minus 22% for new buyer enquiries and minus 18% for agreed sales, with its members expecting broadly stable market conditions over the following year. Those balances are measures of surveyor sentiment, not percentages by which transactions fell. [2]

At its September meeting the Bank of England kept Bank Rate at 3.75%, while three of the nine policymakers preferred a rise. The Bank also warned about energy-led inflation pressures. It would be unwise to build a development appraisal around an assumption that borrowing will become substantially cheaper on a convenient timetable. [3]

What the published forecasts suggest

Savills revised its mainstream residential price forecasts in June 2026. Its central outlook envisaged UK prices increasing 2.5% in 2027 and 5.0% in 2028, with a slower recovery for London and the South East. These are forecasts, not guarantees, and relate to the broad resale market. They cannot be inserted directly into a development appraisal for a specific new-build scheme. [4]

I would treat these projections as one possible background, not the engine of value creation. A cautious appraisal should still work with weaker sales values, slower reservations and higher holding costs than a central forecast implies.

Three ways the market could develop

In a more favourable outcome, financing pressures ease, consumer confidence improves and buyers who have delayed decisions begin to move. Well-positioned schemes could benefit, but not necessarily all at once or in every location.

In a more hesitant outcome, incomes and affordability improve only gradually. Buyers remain discerning; sellers adjust expectations; and projects with the right mix of space, transport, energy performance and practical amenities compete more effectively than generic product.

In a more difficult outcome, stubborn inflation and higher financing costs continue to weigh on demand while construction prices and programmes remain challenging. In that case, protecting capital, phasing commitments carefully and retaining flexibility become even more important. None of these outcomes can be assigned a reliable probability from the available data.

Housing need is real but not the same as a sales guarantee

England is still delivering fewer new homes than its long-term ambitions. The government estimates 196,900 net additional homes in the 2025–26 financial year, down from 208,600 the previous year, although these newer figures are provisional. [5] That points to a supply challenge, but it does not remove the need to price each proposed development against real local purchasing power.

For Rocket, the sensible opportunity is therefore not to bet on a national market surge. It is to identify sites where existing transport, amenities and neighbourhood demand create a sound starting point, and where design can add something that buyers can see and value. It is also to understand when the numbers do not support a scheme.

What buyers and investors should watch

I would watch mortgage affordability, local comparable sales, the rate at which homes reserve, construction tender prices, build programme risk and planning progress. I would also ask more human questions. Would someone enjoy living here? Does the development fit the street? Is there a credible reason why this home should be preferred to the alternatives?

My view is that 2027 and 2028 could reward thoughtful, well-located development, but they are unlikely to reward complacency. A good scheme should be able to explain its appeal in the market we have, not just in the market we hope to see.