House prices in Wales are forecast to rise more sharply over the next five years than for the UK as a whole, according to new research from Savills published at the annual housing week from law firm Hugh James.
The average house price in Wales is expected to rise by 21% from £206,000 at the end of this year to £249,500 by the end of 2031, an actual increase of £43,500. This is predicted to outpace the UK average rise of 15.8%, from £360,500 to £417,000, an actual increase of £56,500.
Affordability supports growth
Savills attributes Wales's stronger price outlook partly to its relative affordability, which it says should help offset higher interest rates for buyers. Welsh house prices currently stand at 71% of the UK average, a proportion forecast to reach 73% by the end of 2031.
Growth is expected to remain subdued in the short term. The report predicts prices will rise by 0.5% in 2027 as higher mortgage rates weigh on demand. It expects growth to accelerate from 2028 as interest rates fall and affordability improves.
Supply pressures highlighted
The report also warns that the recent increase in housebuilding may be difficult to sustain. Although completions rose by 10% per year by the third quarter of 2026, they remained 12% below the estimated annual housing need.
Planning consents were almost a third below need, while housing starts were 21% lower than completions, suggesting the pipeline of homes under construction is shrinking.
Affordable housing delivery reached a record 3,865 homes in 2025/26, 17% above the five-year average. However, net delivery would need to rise by 49% to meet the Welsh Government's target of 20,000 social and intermediate rent homes by March 2030, and planned delivery for 2026/27 is still 19% below the annual level needed to meet that target.
Sector leaders respond
Caroline O'Flaherty, partner and head of social housing at Hugh James, said: "This report highlights both the opportunity and the scale of the challenge facing the housing sector in Wales. The forecast for house price growth is very encouraging, but the figures on supply show how much work there is still to do if we are to meet targets."
Caroline Jones, director at Savills, said: "Our report points to a stronger five-year outlook for Welsh house prices than for the UK overall, but it also highlights real pressures on delivery with planning consents still below estimated need."
