The combination of high mortgage rates and a softening economy means we expect house prices to grow by just 1.5% in the year to Q4 2026. But we think a bigger fall in interest rates, and therefore mortgage rates, than most expect in 2027 will allow prices to rise by an above-consensus 3.5% in the year to Q4 2027. In the rental market, we suspect that a recovery in demand and a further tightening in supply will push up market rents growth from 2.5% this year to around 3.5% in both 2027 and 2028. (Clients can explore and download all our UK housing forecasts in our UK Housing data dashboard.)