Britain’s top-end housing market has stalled
Key Points
- Sales of UK homes worth £1 million or more fell 7% in the first half of 2026.
- Savills blamed higher-than-expected borrowing costs, geopolitical uncertainty and the threat of tax changes for the drop in buyer confidence.
- New homes sales revenue also fell as developers brought fewer schemes to market on viability grounds.
- Savills' UK residential revenue dropped 9% to £80 million despite the firm gaining market share.
- Wider UK property investment fell 12% over the half, against an 18% rise in global volumes.
Sales of UK homes worth £1 million or more fell 7% in the first half of 2026 as buyers pulled back in the face of higher borrowing costs and the prospect of tax changes, estate agency Savills said in its half-year results on Thursday (13 August).
Savills pointed to three constraints on confidence in the prime market:
- Heightened geopolitical and macroeconomic uncertainty
- Borrowing costs that came in higher than expected
- Tpotential threat of fiscal change.
The firm gained market share across both its London and country markets despite the decline, and reported record levels of customer satisfaction alongside a higher-than-average proportion of listed stock sold.
The group noted that fewer new homes are reaching the market across all bands. Savills recorded a fall in new homes sales revenue over the period, which it put down to continuing viability challenges facing UK residential development and a consequent reduction in the number of schemes being brought forward.
The firm’s UK residential revenue fell 9% to £80 million in the six months to 30 June 2026, with underlying profit down to £2.7 million from £4.2 million a year earlier.
The slowdown extends beyond housing. UK property investment fell 12% over the half while global investment volumes rose 18%, with the US market up 24% and Asia Pacific up 31%.
Savills said transaction timeframes in Britain remained elongated and investor demand selective, with strong pipelines but limited new stock coming to market.
Sentiment cooled through the second quarter after a positive start to the year. Savills attributed the change to the escalation of conflict in the Middle East at the end of February, its knock-on effect on interest rates, and later to anticipated political change in the UK.
