Savills has cut its 2026 mainstream UK house price forecast from growth of 2 percent to a fall of 2 percent, warning that higher mortgage costs and extra stock from landlords selling up are weighing on demand. For landlords, that is a more direct warning than the usual broad market downgrade.
In its revised forecast, Savills said elevated borrowing costs and weaker sentiment would drag on the market through the rest of 2026, with the biggest pressure expected over the summer. It also said landlord disposals in the face of tighter regulation are adding to available stock, particularly in London and the South East.
That matters now because investors are already balancing weaker capital growth against firmer rents and heavier compliance costs. If more stock comes to market while mortgage rates stay high, landlords may get better buying conditions in some areas, but sellers could face a tougher fight on price.
Landlord sales are now part of the market story
Savills did not just blame geopolitics and mortgage pricing. Its forecast specifically pointed to landlords selling up as one reason price pressure is building in some sub-markets.
That is a notable shift. The house price debate is often framed around owner-occupier affordability alone, but rental sector exits are now feeding into the sales market in a way investors cannot ignore. More resale stock may improve choice for buyers, yet it also raises the risk of softer values where ex-rental homes are concentrated.
This follows Landlord Knowledge’s report on Savills data showing 700 rental homes a day leaving the market. The latest forecast suggests that trend is no longer just a supply story for tenants – it is also becoming a pricing story for landlords trying to sell.
North and devolved markets look more resilient
Savills expects the North of England, Scotland and Wales to hold up better while mortgage rates remain elevated, citing a stronger affordability cushion. By contrast, London is forecast to fall 4 percent in 2026, with the South East and East of England down 3.5 percent.
For landlords, that creates a clearer regional split. Investors in more affordable markets may still find relative resilience in yields and pricing, while those in stretched southern markets may need to assume longer selling periods and tighter negotiations.
That regional divide fits with recent signals elsewhere on Landlord Knowledge, including ONS data showing rents still rising while house price growth softens. In simple terms, income may keep supporting the investment case even where capital values go sideways or dip.
What this means for landlords
- If you’re selling: factor in a weaker summer market, especially in London and the South East.
- If you’re buying: softer prices may create openings, but only if the rental return still works at today’s finance costs.
- Watch for: whether more landlords list stock after the first full quarter under the Renters’ Rights Act.
- Bottom line: lower house price expectations do not kill investment, but they do punish landlords who rely on old assumptions about easy capital growth.
Editor’s view
Landlords can live with flat or falling prices if the income and strategy still stack up. What catches people out is pretending the sales market has not changed. Savills is effectively saying that landlord exits are no longer background noise – they are part of the price pressure.
Author: Editorial Team – UK landlord & buy-to-let news, policy, and finance
Published: 02 June 2026
Sources: Savills
Related reading: Savills: 700 rental homes a day leave landlord market
