- Post-2010 growth in midlands and northern regions is pipped to beat London
House prices are set to rise by 2.5 per cent in 2026, according to fresh data – with the East Midlands taking over London in terms of long-term price growth.
While the capital has seen extraordinary house price growth since the 2010s, that landscape is changing, according to the estate agent Hamptons.
Since the end of 2010, when house prices bottomed out, prices in London have risen by 84 per cent, outperforming every other region and the British average of 74 per cent.
But Hamptons says that the East Midlands will now take over as the top performer next year, and by 2028 will have seen 94 per cent growth.
Property price growth in the West Midlands and North West will overtake London in the price growth stakes by the end of 2027, and will see 90 per cent and 88 per cent ptice growth respectively by 2028.
London will fall to fourth place and will be the only region where average prices remain below their 2022 peak.
Hamptons said this was because the regions had ‘stronger affordability and economic resilience’ compared with the capital.
The shift marks a ‘major change in the regional house price cycle’, the firm says.
‘The balance of power is shifting: the Midlands is forecast to have seen more house price growth than London since prices bottomed out after the 2008 financial crash’, Aneisha Beveridge, head of research at Hamptons, said.
Where are house prices headed?
Between now and the end of 2028, property prices in the West Midlands are expected to have surged by 12 per cent, compared to a measly 0.5 per cent over the same period in London.
The North East, where the average cost of a home is £161,770, house prices are forecast to rise by 16.4 per cent by the end of 2028.
Across the East Midlands, Scotland and Yorkshire and the Humber, property prices are expected to increase by 10.4 per cent, 13.6 per cent and 12.5 per cent respectively by the end of 2028.
What is going wrong in London?
Property prices in London are expected to remain sluggish over the next few years.
According to official figures, annual house price inflation was lowest in London in the year to September 2025.
Prices in the capital fell by 1.8 per cent in the period, against a fall of 0.8 per cent in the year to August 2025. The average cost of a home in London is now £556,454.
In 2025, 14 per cent of London sellers sold at a loss, up from 6 per cent in 2016. Amid higher stamp duty and an upcoming mansion tax, there is little incentive for many in the capital to move, Hamptons said. First-time buyers comprised half of sales in London last year.
Hamptons said London has ‘consistently underperformed’ against the rest of Britain on the property price growth front since 2016. It expects this trend to continue, forecasting zero growth in the capital next year.
Slowing down: Property prices in London are expected to remain sluggish over the next few years, Hamptons said
On the upcoming mansion tax and its impact on London, Hamptons said: ‘While small price falls are expected in the £1.9m-plus segment, this is likely to be offset by growth in the mainstream market, where improving affordability and easing mortgage rates are starting to support buyer confidence.’
Beveridge added: ‘London, which historically leads recoveries, is being held back by higher stamp duty and broader tax anxieties, locking some owners into their homes and others out of buying them.’
She added: ‘The next phase of the cycle will be shaped less by discretionary moves and more by pragmatism – with policy playing an increasingly central role in determining who moves, when and where.’
What’s next for interest rates and house prices?
Hamptons expects inflation, currently at 3.8 per cent, to fall faster than expected next year. This, it predicts, will prompt the Bank of England to initiate two or three interest rate cuts in 2026.
The estate agency expects interest rates to be around 3.25 per cent by the end of next year, with typical mortgage rates stabilising at around 4 per cent.
‘This should improve the availability of sub-four per cent mortgage deals, even for borrowers with smaller deposits, helping to support price growth and activity’, Hamptons said.
Around 600,000 borrowers on ‘ultra-low’ sub-three per cent five-year fixes will find themselves paying higher rates in 2026 and 2027, Hamptons said.
The estate agency expects house prices across Britain to rise by 2.5 per cent by the final quarter of next year, with stronger growth in the Midlands and North of England where affordability is less stretched.’
House price growth across Britain is expected to moderate to 2 per cent in 2 per cent in the final quarter of 2027 and slip further to 1.5 per cent in the final few months of 2028.
In general, people are moving less often and are ensuring they are buy ‘future-proofed’ homes, Hamptons added.
Homes in the prime country sector look set to suffer as the mansion tax edges closer.
According to Hamptons, properties above the £2million mark in the countryside could see a 5 per cent ‘price correction’, though this is expected to be a one-off event rather than a continual decline.
The findings suggest ‘necessity-driven moves’ will keep property transaction volumes at around the 1.15million a year mark, though slightly behind historic norms.
Hamptons said: ‘The absence of a stamp duty holiday, traditionally a catalyst for activity, means sentiment will rely more on economic fundamentals.’