Knight Frank cuts 2026 UK house price growth forecast to 1.5% as Middle East shock weighs on outlook

Knight Frank has cut its 2026 UK house price growth forecast to 1.5%, from 3% in September, citing higher mortgage rates and Middle East uncertainty. Five-year swap rates are around 4% versus 3.5% before the war, feeding through into fixed-rate pricing. For sellers, that means asking strategy needs to reflect a slower year, not a stalled one. For buyers, less competition — but only if rates settle from here.