The Midlands is set to outperform the capital for house price growth in the next few years, Hamptons has predicted.
Prices in London have risen by 84% since Q4 2010, outperforming every other region and the Great Britain average of 74%.
But next year could mark a turning point: the East Midlands is forecast to overtake London in cumulative growth, with the North West and West Midlands following by the end of 2027.
London has underperformed the rest of Great Britain since 2016, and the upcoming Mansion Tax (council tax surcharge) coming into effect in April 2028 should continue dampening down the top end of the market.
Aneisha Beveridge, head of research, at Hamptons, said: “It’s hard to ignore the growing drag of taxation and politics. 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.
“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.
“At the same time, the balance of power is shifting: the Midlands is forecast to have seen more price growth than London since prices bottomed out after the 2008 financial crash.”
House prices across Great Britain, based on the ONS House Price Index, are forecast to rise by 2.5% in Q4 2026, with stronger growth in the Midlands and North where affordability is less stretched.
Properties above the £2m mark could see around a 5% price drop, but this is expected to be a one-off adjustment rather than a prolonged decline, as markets absorb the change and stabilise.