{"id":10593,"date":"2026-04-28T12:02:33","date_gmt":"2026-04-28T12:02:33","guid":{"rendered":"https:\/\/second-home.uk\/?p=10593"},"modified":"2026-04-28T12:02:33","modified_gmt":"2026-04-28T12:02:33","slug":"knight-frank-cuts-uk-house-price-forecasts-on-economic-headwinds","status":"publish","type":"post","link":"https:\/\/second-home.uk\/?p=10593","title":{"rendered":"Knight Frank cuts UK house price forecasts on economic headwinds"},"content":{"rendered":"<p>Knight Frank has downgraded its near-term UK house price forecasts whilst raising longer-term projections, citing current economic uncertainty alongside more optimistic assumptions about future government policy.<\/p>\n<p>The estate agency now expects UK house price growth of 1.5% in 2026, followed by 3% in 2027 and 4% in 2028. This represents a downgrade from its September forecast, which projected 3% growth in 2026 and 4% in 2027.<\/p>\n<h2>Economic uncertainty weighs on market<\/h2>\n<p>Knight Frank identified higher mortgage rates, softer buyer sentiment and Middle East conflict-related uncertainty as creating a \u2018triple headwind\u2019 for the market. Five-year swap rates, which lenders use to price fixed-rate mortgages, were trading at around 4% this week compared to just under 3.5% before the conflict started, though down from 4.3% in March.<\/p>\n<p>Economic indicators have shown mixed signals. Halifax reported annual house price growth slowing to 0.8% in March from 1.2%, whilst Nationwide recorded an increase to 2.1% from 0.9% over the same period. Inflation is estimated to have risen to 3.3% in March, driven by higher energy costs, although underlying inflation came in lower than expected at 3.1%.<\/p>\n<p>Tom Bill, head of UK residential research at Knight Frank, said: \u2018We will only know the full impact in coming months, which depends on how long the war lasts and to what extent it escalates.\u2019<\/p>\n<p>Bill noted that any effect on house prices would be mitigated by the fact more residential property is owned outright (36%) than with a mortgage (29%) in England.<\/p>\n<h2>Political change underpins longer-term outlook<\/h2>\n<p>Despite near-term caution, Knight Frank has raised its longer-term forecasts on the assumption of a new government taking office in 2029. Bill explained that current polling suggests policy will be shaped by a stronger instinct for lower taxes and tighter control over government spending.<\/p>\n<\/p>\n<p>\u2018Such an approach has the potential to put downwards pressure on government borrowing costs and improve affordability in the housing market,\u2019 Bill said. The firm believes a change in political direction will underpin annual house price growth of more than 5% in mainstream and prime markets in 2030.<\/p>\n<h2>Rental market pressures persist<\/h2>\n<p>Knight Frank has marginally lowered its rental forecasts, but expects upwards pressure on rents to persist following the introduction of the Renters\u2019 Rights Act on 1 May. The new rules raise risks for landlords around repossessing or selling properties, setting rents and guaranteeing rental income.<\/p>\n<p>Bill said: \u2018These additional risks will require extra reward and put upwards pressure on rents. This may be exacerbated by tighter supply as more <a href=\"https:\/\/www.propertywire.com\/news\/uk\/uk-flat-sales-face-pressure-as-landlord-supply-rises\/\">landlords leave the sector<\/a> once the new rules are in force.\u2019<\/p>\n<p>The firm expects 3.5% annual growth in prime central and outer London this year, up from current respective rates of 1.2% and 2.8%. Rental activity is also expected to benefit in the short-term as demand moves across from the sales market due to higher borrowing costs.<\/p>\n<p>Activity has been supported to some extent by people looking to temporarily move back to London from the Middle East, according to the firm, though broader <a href=\"https:\/\/www.propertywire.com\/news\/uk\/dispute-over-eviction-data-emerges-ahead-of-rental-reforms\/\">concerns about rental reforms<\/a> continue to shape market dynamics.<\/p>\n<p>Knight Frank acknowledged that making predictions currently comes with a particularly long list of caveats, including uncertainty over how the government will respond to economic shocks and potential tax speculation ahead of the autumn Budget.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Knight Frank has downgraded its near-term UK house price forecasts whilst raising longer-term projections, citing current economic uncertainty alongside more optimistic assumptions about future government policy. The estate agency now expects UK house price growth of 1.5% in 2026, followed by 3% in 2027 and 4% in 2028. This represents a downgrade from its September [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":1841,"comment_status":"","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[2],"tags":[],"class_list":["post-10593","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-second-home"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Knight Frank cuts UK house price forecasts on economic headwinds - Second Home<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.propertywire.com\/news\/uk\/knight-frank-cuts-uk-house-price-forecasts-on-economic-headwinds\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Knight Frank cuts UK house price forecasts on economic headwinds - Second Home\" \/>\n<meta property=\"og:description\" content=\"Knight Frank has downgraded its near-term UK house price forecasts whilst raising longer-term projections, citing current economic uncertainty alongside more optimistic assumptions about future government policy. The estate agency now expects UK house price growth of 1.5% in 2026, followed by 3% in 2027 and 4% in 2028. This represents a downgrade from its September [&hellip;]\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.propertywire.com\/news\/uk\/knight-frank-cuts-uk-house-price-forecasts-on-economic-headwinds\/\" \/>\n<meta property=\"og:site_name\" content=\"Second Home\" \/>\n<meta property=\"article:published_time\" content=\"2026-04-28T12:02:33+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/second-home.uk\/wp-content\/uploads\/2025\/07\/683e6f66-589d-44c3-b3d1-d5434f23cffa_3290e17f.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1024\" \/>\n\t<meta property=\"og:image:height\" content=\"682\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"admin\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"admin\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/www.propertywire.com\\\/news\\\/uk\\\/knight-frank-cuts-uk-house-price-forecasts-on-economic-headwinds\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/second-home.uk\\\/?p=10593\"},\"author\":{\"name\":\"admin\",\"@id\":\"https:\\\/\\\/second-home.uk\\\/#\\\/schema\\\/person\\\/4d1b4955add7c14742a3be9aaae12292\"},\"headline\":\"Knight Frank cuts UK house price forecasts on economic headwinds\",\"datePublished\":\"2026-04-28T12:02:33+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/second-home.uk\\\/?p=10593\"},\"wordCount\":524,\"image\":{\"@id\":\"https:\\\/\\\/www.propertywire.com\\\/news\\\/uk\\\/knight-frank-cuts-uk-house-price-forecasts-on-economic-headwinds\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/second-home.uk\\\/wp-content\\\/uploads\\\/2025\\\/07\\\/683e6f66-589d-44c3-b3d1-d5434f23cffa_3290e17f.jpg\",\"articleSection\":[\"Second Home\"],\"inLanguage\":\"en-US\"},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/second-home.uk\\\/?p=10593\",\"url\":\"https:\\\/\\\/www.propertywire.com\\\/news\\\/uk\\\/knight-frank-cuts-uk-house-price-forecasts-on-economic-headwinds\\\/\",\"name\":\"Knight Frank cuts UK house price forecasts on economic headwinds - 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