UK house prices fall as Iran war uncertainty dampens demand
UK property values dipped by 0.5% in March, as reported by Halifax, with mortgage rates climbing due to the Middle East conflict’s effects. The average price for homes now stands at £299,677, marking a slowdown in annual growth. This decline follows a 0.3% increase in February, before the conflict began to drive up energy costs and stir inflation concerns.
Recent weeks have seen a surge in mortgage rates, leading to the disappearance of numerous low-cost deals. Last month witnessed the most significant daily withdrawal of such offers since the controversial 2022 mini-Budget introduced by former Prime Minister Liz Truss. However, Halifax noted that the current rate hikes are less steep than those experienced four years prior.
“The housing market’s recent slowdown reflects the broad uncertainty surrounding the Middle East conflict,” explained Amanda Bryden, head of mortgages at Halifax. “Rising energy prices have heightened inflation expectations, prompting higher mortgage rates and undermining confidence in potential interest rate cuts this year.”
Bryden added that the duration of this weakened demand will hinge on the persistence of these pressures and their broader economic implications, including potential impacts on employment levels.
