The Midlands and North West of England are set to surpass London in cumulative house price growth since the market's low point following the 2008 financial crisis, a new housing forecast suggests.
Nationally, property values are anticipated to register "modest" percentage increases next year, with Britain-wide growth of 2.5% annually by the fourth quarter of 2026, Hamptons predicts.
However, London's price growth is forecast to stagnate, showing a 0.0% annual change in the fourth quarter of 2026 as the capital absorbs recent tax modifications, the estate agency indicated.
Small price reductions are anticipated in the £1.9 million-plus bracket, though this is likely to be balanced by growth in the mainstream sector.
In the Budget, the Government unveiled a high-value council tax premium in England on properties exceeding £2 million, taking effect from April 2028.
Four price bands will apply, with the levy beginning at £2,500 annually for homes valued above £2 million, climbing to £7,500 for those worth over £5 million.
Premium country markets experienced robust price appreciation after the coronavirus outbreak, during the so-called "race for space".
Hamptons cautioned that properties beyond the £2 million threshold "could see around a 5% price correction, but this is expected to be a one-off adjustment rather than a prolonged decline, as markets absorb the change and stabilise". The findings stated: "Tax policy is increasingly acting as a levelling-up mechanism, limiting recovery in higher-value markets in London and the South."
Hamptons predicted that property transaction volumes will hold steady at 1.15 million in 2026, with improvements in affordability counterbalancing economic challenges and tax pressures.
The analysis highlighted that, whilst London has traditionally been considered the "safe bet" for sustained price appreciation, this dynamic is shifting.
From the fourth quarter of 2010, when the market "bottomed out", London property values have climbed by 84%, surpassing the Britain-wide average of 74%, according to Hamptons.
However, the firm suggested next year could represent a "turning point".
Hamptons forecasts that the East Midlands will surpass London in cumulative growth next year, with the North West and West Midlands poised to follow suit by the close of 2027.
Looking ahead to 2028, Hamptons anticipates that house prices across Britain will have increased by 84% since 2010.
The East Midlands is projected to be the "top performer" during this period (registering 94% growth), with the West Midlands (90%) and the North West (88%) close behind, the research suggested.
London is anticipated to record average house price growth of 84% over the same timeframe – matching the Britain-wide average – with the anticipated shift reflecting stronger affordability and economic robustness in certain other regions compared with the capital, Hamptons noted. Whilst London is predicted to slip to fourth position for percentage price growth, the capital's property values remain substantially higher in cash terms than anywhere else across the º£½ÇÊÓƵ.
This indicates that the typical London property will still have jumped by £257,000 between the final quarter of 2010 and the final quarter of 2028, the projections suggest.
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Aneisha Beveridge, head of research at Hamptons, commented: "Inflation is easing, mortgage rates are falling, and affordability is improving, which should support modest price growth next year."
She continued: "But 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."
She also noted: "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."
Hamptons has released its predictions for annual house price growth in the fourth quarter of 2026:.
- London: 0.0%
- East of England: 0.5%
- South East: 0.5%
- South West: 1.5%
- East Midlands: 3.0%
- West Midlands: 3.5%
- North East: 4.5%
- North West: 3.0%
- Yorkshire and the Humber: 4.0%
- Wales: 3.5%
- Scotland: 3.0%
