Telegraph: House Prices Set to Keep Falling Until 2028

The Telegraph has reported that UK house prices are forecast to keep falling until 2028, a prediction that, if it holds, would mark one of the longest sustained downturns in the modern housing market. For a sector that has spent much of the past two decades defined by near-relentless capital appreciation, punctuated only by brief corrections, a multi-year decline of this length would represent a genuine structural shift rather than a routine cyclical wobble.

Why does this matter so much to UK property investors? Because the entire buy-to-let and residential investment model of the last generation has been built on the assumption that time in the market smooths out short-term volatility and delivers capital growth over the medium term. A forecast stretching falls out to 2028 challenges that assumption directly. Landlords who bought at or near recent peaks, developers who underwrote schemes on the expectation of rising exit values, and first-time buyers weighing up whether to purchase now or wait, all face a materially different calculus if the Telegraph's reported timeline proves accurate.

For buy-to-let landlords, the implication is that income yield, rather than capital appreciation, becomes the dominant investment thesis for the remainder of this decade. Portfolios in cities such as Manchester, Leeds and Liverpool, which have historically attracted investors on the strength of strong rental demand and relative affordability compared with London and Surrey, may hold up better in rental terms even if capital values stagnate or soften. London and Surrey, where property values are higher and more sensitive to mortgage costs, are arguably more exposed to the kind of prolonged price weakness the Telegraph's forecast describes, given that affordability constraints bite hardest where price-to-income ratios are already stretched.

First-time buyers, meanwhile, find themselves in an unusual position. A sustained period of falling prices could, in theory, improve affordability, but only if mortgage rates and lending conditions cooperate. PropertyNews analysis suggests that the real determinant of whether this forecast translates into genuine opportunity for new entrants will be the direction of interest rates and mortgage product availability over the same period, rather than headline price falls alone. A falling market with tight credit conditions can leave first-time buyers no better off, simply trading one barrier to entry for another.

Developers and commercial investors face a different set of pressures. Scheme viability calculations in cities including Birmingham and Newcastle, where regeneration-led development has driven much recent activity, typically assume a degree of value uplift between land acquisition and completion. A multi-year period of price falls, as described in the Telegraph's reporting, would force a recalibration of those assumptions, potentially slowing the pipeline of new housing delivery at precisely the point the country needs more supply. This creates a paradox worth watching closely: a falling price environment intended to improve affordability could, perversely, choke off the very development activity needed to sustain long-term affordability gains.

Looking ahead six to twelve months, PropertyNews expects the market response to this kind of forecast to be uneven rather than uniform. Investors with strong balance sheets and a focus on rental income are likely to continue acquiring selectively, particularly in regional cities where yields remain attractive relative to purchase price. More leveraged landlords and speculative developers, by contrast, are likely to adopt a wait-and-see posture, delaying acquisitions and launches until there is greater clarity on where the bottom of this cycle actually lies. The practical conclusion for market participants is that a forecast of falling prices until 2028 should not be read as a signal to exit the market altogether, but as a clear instruction to re-underwrite every investment decision around income resilience and regional fundamentals rather than assumed capital growth.