8 April 2026
"Halifax’s latest house price index shows UK house prices dropped by 0.5% in March, taking annual growth to 0.8% and the average UK house price to £299,677.
“March is the first full month in which the conflict in Iran fed through into UK mortgage pricing, making this data set an important early test of how higher borrowing costs are starting to affect the housing market.
“Higher energy prices have pushed up inflation expectations and swap rates, forcing lenders to reprice and withdraw products, and leading to a sudden deterioration in affordability.
“Changes in mortgage costs do not feed through to house prices immediately, so any meaningful shift in price momentum linked to the recent rise in borrowing costs is likely to emerge from this point onwards.
“Looking ahead, the path for house prices will depend largely on how the conflict evolves. If tensions ease and energy‑driven inflation pressures recede, mortgage rates could stabilise and drift lower again, supporting broadly flat prices. If the conflict drags on, persistently higher mortgage rates are more likely to translate into weaker activity and softer prices, particularly in more rate‑sensitive parts of the market.”
“For households with mortgages due to mature later this year, the lesson from recent weeks is that geopolitical risk can feed through to borrowing costs very quickly. Securing a rate early can provide certainty in an unpredictable market, while still allowing flexibility should conditions improve.”
