Industry experts have been quick to respond to the latest Halifax House Price Index, with early signs that shifting mortgage pricing and global uncertainty are beginning to filter through to the housing market.
While headline movements remain relatively modest, commentators across the mortgage and property space are pointing to a clear change in sentiment. Rising borrowing costs, driven in part by geopolitical tensions and their impact on inflation expectations, are starting to weigh on affordability and buyer confidence, key considerations for brokers supporting clients through an increasingly complex landscape.
Karen Noye, mortgage expert at Quilter, comments:
“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.”
Amy Reynolds, head of sales at Richmond estate agency Antony Roberts:
“Halifax’s data reinforces what we’re seeing on the ground: prices are broadly stable, with modest growth where supply is tight, and homes are priced realistically.
The Middle East conflict has contributed to increased caution across financial markets. Mortgage rates have already edged upwards, and this is naturally becoming a talking point among applicants.
We are seeing a slight softening in viewing numbers as some pause to assess the situation; however, the underlying market remains robust. Serious buyers are still very active, with second viewings continuing and sales being agreed at levels typical for this time of year. While there is greater awareness of cost, for the right property, committed buyers are continuing to move forward with confidence.”
Jeremy Leaf, north London estate agent and a former RICS residential chairman, says:
“Activity picked up encouragingly earlier this year, but was stopped in its tracks when it became apparent that fallout from war in the Middle East would be more long-lasting than previously feared.
Many buyers have been supported by mortgage offers obtained before hostilities started, so they have been able to take advantage of sellers’ lower expectations. This survey from the country’s largest lender confirms what we have seen on the ground –that some of the less-committed have paused while the more serious are negotiating hard, so we are only seeing a wobble not a more serious dip in prices.
However, even if the conflict ends soon, inflation and mortgage rates driven up by oil price rises are likely to persist for a while at least.”
Tomer Aboody, director of specialist lender MT Finance:
“The market saw a small bounce at the end of last year and into this one once the Budget was out of the way, as buyers and sellers felt more confident about their prospects.
Although the hope of lower rates and stamp duty is dwindling, many have already come to the conclusion that there is only so long they can put off the decision to move before they simply have to because of their situation. The data suggests that many have waited for so long that they are pressing on regardless of the Middle East conflict and pressures that place on our economy.”
Jason Tebb, President of OnTheMarket, comments on the Halifax House Price Index for March:
“The momentum created by several interest rate reductions over the past year and a half, combined with post-Budget clarity, continues to be in evidence on the ground, with needs-driven buyers and sellers who have put moves on hold focused on transacting.
With further rate reductions on hold for the short term at least, and the threat of rate rises a concern the longer the conflict in the Middle East continues, those with competitive mortgage offers are keen to proceed before rates edge higher.
While much depends on the length of the conflict and its wider implications for the economy, for now the housing market’s resilience in the face of political and economic uncertainty is apparent as life events will always prompt people to move, whether that’s upsizing, downsizing or relocating.”
Jonathan Hopper, CEO of Garrington Property Finders, commented:
“After a tempestuous month on the financial markets, the first warning light on the property market dashboard has blinked on.
Yet for now, the light is amber rather than red. The monthly pace of price rises has slipped into negative territory and the annual rate of price inflation has cooled by a third. But we’ve seen similar monthly swings in the past amid far more benign circumstances.
That’s not to say the impact of the Iran conflict isn’t reflected in Halifax’s March figures. But at this stage, this first month of data is a poor indicator of where the market will go next.
The reason for this distance is that the financial markets are moving far faster than the property market. As the past 24 hours show, extreme volatility is an almost daily occurrence on the financial markets.
Nevertheless the surge in the cost of fixed rate mortgages over the past month has cooled buyer demand, as has the general sense of uncertainty caused by the war.
As the spring surge in listings adds to an already abundant number of homes for sale, many sellers are being forced to trim asking prices or accept lower offers from buyers who increasingly hold all the cards.
Demand is holding up very well among buyers who are less mortgage-reliant – downsizers for example – and those lucky enough to have secured a mortgage offer in February or before.
Price growth was modest, and in many areas it was a buyer’s market, even before the conflict began. With further price falls now on the cards, that trend is likely to continue as the conflict injects uncertainty into the market.
History tells us that uncertainty does nothing good for the property market, and while this first set of data doesn’t fully capture the war’s impact, the coming months could get challenging for sellers.”
Nathan Emerson, CEO of Propertymark comments:
“We are at an important intersection where we must clearly acknowledge future challenges ahead. We started the year with positivity in terms of seeing an uplift in the average number of viewings per available property, coupled with general consumer positivity regarding affordability.
However, a lot has changed in a short space of time, with numerous sub 4% mortgage deals being withdrawn over the last few weeks as the wider economy adjusts to potential uncertainties.
Inflation is expected to increase over the coming months, and this is likely to have an immediate effect on consumer affordability. The rate of inflation will also play intense influence on the Bank of England regarding base rate decisions over the forthcoming months too. In addition, we are also due to see OFGEM make their next decision regarding energy price caps late next month, which again should be highly considered regarding household affordability as the year plays out.”
Nicky Stevenson, Managing Director at Fine & Country, comments:
“A modest fall in house prices last month is a reminder that sellers should still expect the market to be choppy from one month to the next. While changes in sentiment and borrowing costs might be fuelling this adjustment, the bigger picture is still one of modest stability. House prices remain higher than a year ago, and the quarterly trend is still positive.
“The average property price has dipped under £300,000, which will be welcome news to first-time buyers, who might have seen that headline figure as unreachable. It is hardly a dramatic shift, but it does suggest the early spring momentum has taken a pause while buyers keep a close eye on mortgage pricing and wider economic challenges facing the country.
Higher fuel prices and looming increases to energy bills are feeding into inflation expectations, which can quickly shake confidence, even if the rise in mortgage rates has been relatively modest compared with past shocks.
When all is said and done, activity measures are still showing life under the bonnet. February transactions rose month-on-month, and mortgage approvals also picked up, which suggests many movers are still progressing, even if some are taking an extra breath before committing.
The regional story remains a tale of two markets. Northern Ireland continues to lead annual growth, and the North East is still performing strongly, while parts of the South are softer, with the South East and London showing year-on-year falls. For years now, national headlines have only ever told part of the story.
Overall, today’s figures show a cooling-off rather than a turning point. Buyers are still there, but they’re value-led and increasingly sensitive to what they see on the news. For sellers, the smartest approach is to stay in tune with local demand and price for today’s market. You will discover that when you do, the right buyers are still willing to act.”
