With 52 years in the residential property market and experience across four recessions, Trevor Abrahmsohn, managing director and founder of Glentree International, has shared his predictions for 2027. He expects residential property values across the main price bands to remain largely unchanged, with potential movements of up or down 3%.
Economic backdrop and interest rates
Abrahmsohn notes that the Iranian and Ukrainian wars remain geopolitical uncertainties, and a settlement of either could ease inflationary pressures across the UK and the Western world, lessening upward pressure on interest and mortgage rates. For now, he assumes these conflicts will continue.
With the Bank of England having increased the bank rate to 4.4%, he suggests there is probably only one more increase to come in 2027, when it is likely to peak at 4.25%. Inflation is currently around 3.5% and may peak at 3.75% before hopefully returning to the Bank's 2% target in 2028. Mortgage rates, currently around 5.5–6%, are likely to remain in this range for the next twelve months.
Sales market by price bracket
In the £1 million–£3 million market, Abrahmsohn says values are probably down around 10% from their peak in 2024. Sales can take three to six months, with viewing numbers dwindling from 40 to 15, and instead of five competing offers, sellers may get just one. He highlights buyers who have already sold and are perhaps renting as the real assets, as they can proceed without complex property chains.
In the £5 million–£10 million market, an immaculate, ready-to-occupy home can still achieve a price reminiscent of the post-Covid days. However, tired properties or sites needing development may be discounted by as much as 20%, reflecting the time, cost and VAT-laden challenges of refurbishment or redevelopment. Finding the right buyer may take six to twelve months or longer.
Above £10 million, the market is increasingly dependent on the wealthy international buyer. Abrahmsohn says Labour's non-Dom reforms have been a self-inflicted own goal, costing the country a fortune. According to Henley & Partners, 16,000 wealth creators have decamped to more tax-friendly jurisdictions. The number of serious buyers is reportedly down by 60–70% from a few years ago. He also cites the Stamp Duty obstacles introduced by former Chancellor Osborne in 2014 as a major hurdle, with Stamp Duty Land Tax reaching 21% at its uppermost level.
Rental market trends
Below £1,000 per week, the rental market remains steady, with supply constrained as the Renters' Rights reforms encourage some buy-to-let landlords to exit, creating upward pressure on rents. At the other extreme, Abrahmsohn notes new ground is being broken with uber-tenants willing to pay an eye-watering £40,000-plus per week for certain Glentree trophy homes, reflecting investments made to cultivate relationships with wealthy clients across Eastern Europe, Scandinavia, Hong Kong and China.
Despite more apocalyptic press commentary, he says there is no oversupply in any of these markets that would herald a price collapse. His advice to sellers and landlords is simple: price for the market that exists, not the one last remembered. He also cautions that a snap election is possible but unlikely, and notes that 30% of FTSE 100 revenues are derived from the USA, so corrections in American capital markets could have a deferred effect on the UK.
