diff --git a/src/main/java/org/springframework/hateoas/UriTemplate.java b/src/main/java/org/springframework/hateoas/UriTemplate.java
index 1e3da868..0560b57f 100644
--- a/src/main/java/org/springframework/hateoas/UriTemplate.java
+++ b/src/main/java/org/springframework/hateoas/UriTemplate.java
@@ -357,10 +357,14 @@ public class UriTemplate implements Iterable<TemplateVariable>, Serializable {
 
 		String head = index == -1 ? template : template.substring(0, index);
 		String tail = index == -1 ? "" : template.substring(index);
-		String encodedBase = UriComponentsBuilder.fromUriString(head)
-				.encode()
-				.build()
-				.toUriString();
+
+		// Encode head if it's more than just the scheme
+		String encodedBase = head.endsWith("://") && tail.startsWith("{")
+				? head
+				: UriComponentsBuilder.fromUriString(head)
+						.encode()
+						.build()
+						.toUriString();
 
 		head = encodedBase.length() > head.length() ? encodedBase : head;
 
diff --git a/src/test/java/org/springframework/hateoas/UriTemplateUnitTest.java b/src/test/java/org/springframework/hateoas/UriTemplateUnitTest.java
index 49980a9e..f7963ece 100755
--- a/src/test/java/org/springframework/hateoas/UriTemplateUnitTest.java
+++ b/src/test/java/org/springframework/hateoas/UriTemplateUnitTest.java
@@ -375,6 +375,13 @@ class UriTemplateUnitTest {
 		assertThat(template.toString()).isEqualTo("/path/{bar}/foo.zip?type=foo{&foobar}");
 	}
 
+	@Test // #1727
+	void supportsVariableInHostName() {
+
+		assertThatCode(() -> UriTemplate.of("https://{somehost}/somepath"))
+				.doesNotThrowAnyException();
+	}
+
 	private static void assertVariables(UriTemplate template, TemplateVariable... variables) {
 		assertVariables(template, Arrays.asList(variables));
 	}