When the property analysts at Knight Frank halve a forecast, you should pay attention. They are not in the business of pessimism. They sell houses. So when they cut their UK house price growth prediction for 2026 from 3% to just 1.5%, they are sending a clear message: confidence has drained out of the housing market, and Westminster bears most of the blame.
A Hat-Trick of Self-Inflicted Headwinds
Knight Frank identified three forces dragging the market down. International conflict in the Middle East has pushed mortgage rates higher. Buyer sentiment has collapsed. And general economic uncertainty has frozen would-be movers in place. Two of those three are domestic. They are not weather. They are policy.
Mortgage rates have already risen by a full percentage point since January. Two-year fixed deals now sit at 4.8%. The number of mortgage products available has fallen from 8,500 to 7,000 in months. Lenders are pricing in risk because they can see what the rest of us can see — a Treasury that has run out of credibility, a chancellor who keeps signalling future tax rises, and a country that is not growing.
The Buyer Strike Is Real
The Royal Institution of Chartered Surveyors has reported a clear drop in new buyer enquiries. Sales agreed in March were 2.5% below the long-run average. Asking-price reductions are spreading across the country. None of this happens in a healthy market. It happens when families look at the future and decide that committing to a thirty-year mortgage right now is a step too far.
I hear the same thing in Preston East. Younger constituents who saved for years are pulling out of purchases. Older constituents who hoped to downsize are sitting tight because the chain has fallen apart underneath them. Estate agents tell me they have not seen sentiment like this since the days immediately after the mini-budget — and back then there was at least a plan to stabilise things.
Labour's Growth Plan Is a Press Release
This government talks endlessly about housing. It has a target. It has an Act. It has a minister. What it does not have is a credible plan to make houses more affordable for the people who actually want to live in them. Slapping new tax burdens on landlords, freezing the personal allowance, raising National Insurance on employers, and signalling further raids in the autumn does not build confidence — it destroys it.
If you genuinely want a healthy housing market you need three things: stable mortgage rates, growing real wages, and a government that does not appear to be eyeing up your savings every six months. We currently have none of those three.
What Reform UK Would Do
Reform UK would lift the personal allowance, cut stamp duty on family homes, and stop the constant threat of new property taxes that has chilled the market. We would back small developers rather than wrap them in red tape. And we would tackle the demand side — including the unsustainable level of net migration — rather than pretending the only lever is to keep building on the green belt.
Knight Frank's downgrade is not a freak forecast. It is the housing market telling the government, through gritted teeth, that confidence has gone. Labour can ignore the warning, or it can change course. So far, all the evidence is that it is doing the former.