UK house prices fall as Iran war uncertainty slows the property market. Average prices dropped by 0.5% in March, Halifax reported.
The typical UK property now costs £299,677. Annual growth also slowed, reflecting caution among buyers. Rising mortgage rates, influenced by global tensions, dampened demand.
The March decline reverses a 0.3% rise in February, recorded before the Middle East conflict. Energy costs surged after the war began, raising fears of inflation and fewer interest rate cuts this year.
Mortgage rates jumped sharply, causing hundreds of cheap deals to disappear. Analysts said March saw the biggest daily withdrawal of deals since the 2022 mini-budget under then-Prime Minister Liz Truss. However, Halifax noted the current mortgage increase remains smaller than four years ago.
Amanda Bryden, head of mortgages at Halifax, said the slowdown reflects uncertainty over the Middle East conflict. She explained that concerns about higher energy prices pushed up inflation expectations. This, in turn, raised mortgage rates and weakened confidence in future interest rate cuts.
She added that these pressures reduced the market momentum seen earlier in the year. Bryden noted the housing market’s future depends on how long these pressures last. Economic impacts, including potential unemployment, will also influence buyer behavior.
The housing sector has been sensitive to global events, and geopolitical tensions often feed through into financial markets. The conflict in Iran has created additional instability, leading buyers to postpone decisions.
Experts suggest that if tensions ease, mortgage rates stabilize, and inflation expectations moderate, demand could gradually recover. Meanwhile, high-energy costs continue to affect household budgets and borrowing decisions.
House prices fall as uncertainty in global markets spreads to the UK. Buyers remain cautious, mortgage lenders adjust offerings, and the property market braces for potential further volatility.
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