The UK property market remains unstable
The number of Britons planning to purchase property fell in March to the lowest level since August 2023, according to data from Royal Institution of Chartered Surveyors.
Experts point out that the first effects of the Middle East conflict reached the British housing market, reflected in a drop in the number of finalized transactions.
Worsening sentiment among Britons is further reinforced by expectations of potential interest rate hikes that the Bank of England may decide on.
A two‑week cease‑fire in the region initially calmed the market, but the fragility of the truce and ongoing pressure from Donald Trump on Iranian authorities over unlocking the Strait of Hormuz continue to sustain expectations of maintained higher loan costs.
"Over the past few months sentiment on the UK property market has undergone significant change," said Tarrant Parsons, director of research and market analysis at RICS.
"The slow improvement in market conditions was nullified by the broader macroeconomic effects of the Middle East conflict," he added.
Experts say that short‑term forecasts for property sales have become "significantly more pessimistic", as evidenced by the growing number of appraisers expecting a downturn in market conditions.
"It's a tough market where prices are absolutely critical," said Alex Howard Baker from Savills.
The situation in the Middle East and the resulting uncertainty over interest rates, Baker says, have caused a standstill "in an already difficult market".
In the coming months, UK real‑estate agents expect a drop in sales and a reduction in property prices after the average fixed mortgage rate rose again above 5%.
Read also: Brutal data from the property market. Apartment sales suddenly fell by almost 20%
See also: Market fracture. "The year 2026 looks good for buying an apartment"
Are apartments getting more expensive or cheaper? There are several answers
The Bank of England, at its March meeting, decided to keep the main interest rate at 3,75%.
We wrote more about this in the article: Inflation lowest in 11 months. Pound heading to 5 PLN, though the market sees more.
One expected rate hike would raise the central bank rate to 4%, unseen since last November.
Experts say that mortgage costs in the UK will remain high for some time, due to the ongoing uncertainty in the Middle East.
"The longer the cease‑fire and market calm last, the more the mortgage market will stabilise, and rates may even start to fall slightly. However, for now, a slowdown or pause in rises is more likely than sudden drops," said Adam French, consumer finance director at Moneyfacts.
Meanwhile, early data from the market show the housing situation in the UK shortly after the US and Israel attack on Iran on February 28.
According to Halifax, property prices fell in March by 5% month‑on‑month, but remained 0.8% higher than the same period last year.
Statistics from Nationwide indicated a rise in apartment prices in that period of 0.9% month‑on‑month and 2.2% year‑on‑year.
The difference in data may be due to different collection methods by the two firms.
Source: Trading Economics.
See also: Brutal data from the property market. 40,000 apartment sale contracts were cancelled in the month
