UK property services firm Savills issued a warning on Wednesday that residential property transactions in its UK and Middle East markets are expected to slow due to increased uncertainty in global interest rate prospects triggered by the Iran conflict. However, the company maintained its performance outlook for 2026 unchanged.

Transaction services constitute Savills' largest revenue source, primarily offering capital and leasing advisory services to commercial and residential investors, as well as owner-occupiers. The company indicated that property transactions are likely to be delayed, with buyers becoming increasingly cautious.

The conflict involving Iran has stirred global markets, raising concerns over prolonged high interest rates, rising energy costs, and strained household budgets. These factors are exerting downward pressure on real estate firms, including residential builders, rental agents, and related service providers.

The company stated, "In our core UK market... both buyers and sellers have become noticeably more cautious since the outbreak of the Middle East conflict."

It further noted that the Middle East market contributed approximately 5% to underlying profit in 2025, and current business activities have significantly slowed amid the ongoing crisis.

Despite issuing the market slowdown warning, Savills reported that its performance for the fiscal year ending December 31 is currently slightly better than expected, with both revenue and profit projected to achieve year-on-year growth. In 2025, the company's revenue increased by 6%, while underlying pre-tax profit rose by 11.4%.

In March of this year, Savills reached an agreement to acquire real estate investment bank Eastdil Secured, in a deal valued at $1.1 billion including debt. This move aims to expand its North American operations and strengthen its capital market presence.