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Tue, 31 Mar 2026

Tue, 31 Mar 2026 Housing market to soften amid Iran war fallout, Nationwide says

The lender says the market regained momentum in March, but rising mortgage and energy costs could hit consumer confidence.
UK house prices rose by 0.9% in March, with the average property now costing £277,186. However, this growth may be short-lived due to rising mortgage and energy costs caused by the Iran war. The conflict has led to higher interest rates, which have increased mortgage rates by up to 1.01%. For a typical £250,000 loan over 25 years, almost £1,800 more is now added to the average two-year fixed deal each year. As a result of these rising costs, household finances are under pressure, and housing market activity is likely to soften. Many households may have to tighten their budgets in response to higher mortgage rates and energy bills, which could deter first-time buyers from entering the market. Experts predict that house prices will not meet previous forecasts of 3.5% growth this year, with some warning that prices may rise by only 1.0% or stagnate if the economy weakens further. The Iran war has also increased pressure on businesses to pass on higher wage costs to customers, leading to a series of price increases for essential items like food and household energy bills.