Two of the country’s largest agencies have turned more cautious on the housing market this week, and the headlines have followed close behind. Savills and Knight Frank both run respected research teams, so when they flag a tougher year ahead it is worth understanding what they have actually said rather than reacting to the alarm.
Savills has revised its 2026 forecast from a 2% rise to a 2% fall. It points to the conflict in the Middle East, the rise in mortgage rates that has come with it, and higher inflation that has pushed up borrowing costs and tightened access to credit. Lucian Cook, its head of residential research, expects the heaviest pressure on prices over the summer as interest rates peak, with London and the South East most exposed. Even so, he calls this a modest adjustment rather than a crash, pointing to stronger affordability than in 2022 and the widespread use of fixed rate mortgages. Savills still expects prices to rise by around 18.5% over the five years to 2030.
Knight Frank strikes a similar note. Tom Bill, its head of UK residential research, expects continued downward pressure on activity through 2026, after HMRC figures showed sales falling 3% between March and April, when the market would normally be gaining momentum. He adds that uncertainty ahead of the autumn Budget is making some buyers hesitate. As Quilter’s Ian Futcher points out, transaction data lags the market by several months, so the full effect of recent events has yet to show.
So what does it mean if you own a home? Less than the headlines suggest. A national average says very little about a specific street in Islington, Highbury or Finchley, and we have advised Londoners since 1852, through downturns far sharper than this one. A softer market does not stop homes selling. It rewards the ones that are well presented and sensibly priced, and leaves the rest sitting. Buyers are still active, just more careful, and they respond to property priced for today rather than last year. With fewer sales overall, the agent you choose matters more, not less.
There is opportunity in this too. In a market where transactions become harder to secure, market share becomes increasingly important. There will be more vendors seeking advice, more owners considering their options, and more chances for us to demonstrate the value of our experience and service. That is the kind of conversation we have been having with our clients for more than 170 years.
If you are weighing up a sale, or you would simply like an honest view of what your property is worth right now, we would be glad to help. Arrange a free valuation with our team, with no obligation, and let us talk through what makes sense for you.
Source: Estate Agent Today
— Drivers & Norris