The average UK house price fell for a second month as the Middle East conflict led to higher mortgage costs and dented consumer confidence.
Prices slipped by 0.1 per cent month on month in April, following a 0.5 per cent fall in March, the mortgage lender Halifax reported.
Amanda Bryden, head of mortgages at Halifax, said: “After a strong start to the year, recent global developments have added a greater degree of uncertainty to the outlook.
“In particular, higher energy prices have fed into inflation expectations, prompting markets to reassess the path for interest rates — a shift that has already pushed up borrowing costs for many buyers.”
The decline took the average property value in April to £299,313.
Annual growth in the price of a typical home halved to 0.4 per cent in April, from 0.8 per cent in March. Economists had predicted a monthly house price fall of 0.1 per cent and an annual rise of 0.6 per cent.
The Royal Institution of Chartered Surveyors, in its most recent survey of estate agents, reported a sharp fall in new buyer enquiries in April, which was put down to higher market interest rates following the onset of the Middle East conflict and a more uncertain backdrop.
Housebuilders have also seen a drop-off in visits to their websites and show homes in recent weeks, which they have attributed to people pausing their moving plans amid higher mortgage costs and geopolitical volatility.
The Bank of England kept borrowing costs at 3.75 per cent last week and investors are pricing in two quarter-point increases in rates by the end of 2026.
However, Nationwide, another mortgage lender that uses a slightly different method to Halifax to calculate values, reported house prices rising for the fourth month in a row to a fresh record in April. Its index showed prices gained by 0.4 per cent during the month, taking the average value to a new high of £278,880.
Ashley Webb, a UK economist at Capital Economics, said the Halifax data suggested that “the housing market has been less resilient to the jump in mortgage rates triggered by the Iran war than the alternative Nationwide measure implies”.
“Even if the Strait of Hormuz re-opened fully soon, we suspect the drag on prices from the rises in mortgage rates we’ve already seen will continue to grow in the coming months,” he said.
Tom Bill, head of UK residential research at Knight Frank, said: “The recent spike in mortgage rates will only put gradual downwards pressure on house prices as more favourable offers that pre-date the Middle East conflict take several months to lapse.”
He expects house prices to fall in the coming months but modest growth to return by the end of the year, depending on how long the conflict lasts.
Rightmove reaffirms guidance
Britain’s leading online property platform reaffirmed its guidance for 2026 despite the “uncertain” backdrop in the housing market.
Rightmove anticipates that revenue will rise by 8-10 per cent in the year, while underlying operating profit will grow by 3-5 per cent, in line with market expectations. Average revenue per advertiser, which is the company’s core revenue stream, also increased in the period, although no figures were provided.
This came despite challenging conditions in the wider housing market. Mortgage rates have risen significantly in the past few months and the Bank of England has warned it may have to raise interest rates as higher energy prices push up inflation.
“We continue to monitor the impact from volatile global macro conditions, including interest and mortgage rate expectations, as well as overall consumer and partner confidence,” Rightmove said.
