How Iran warfare is affecting ‘risky’ UK housing market

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Your help makes all of the distinction. Learn extra The UK housing market is grappling with a major lack of momentum as persistent international and financial uncertainties proceed to dampen house purchaser sentiment.

The Royal Establishment of Chartered Surveyors (Rics) revealed that whereas the 12 months initially started with some encouraging indicators, confidence rapidly weakened amid escalating considerations over inflation, rising rates of interest and broader worldwide instability.

New purchaser inquiries noticed a notable decline in February, with a web steadiness of 26 per cent of property professionals reporting a fall, a deterioration from the 15 per cent recorded in January.

Agreed gross sales additionally remained subdued, with a web steadiness of 12 per cent of pros noting a lower.

Surveyors anticipate a continued dip in gross sales exercise within the quick future. Nevertheless, the long-term outlook seems extra strong, as a web steadiness of 17 per cent of pros count on gross sales to rebound over the subsequent 12 months.

Home costs have been broadly flat total in February, with a web steadiness of 12 per cent of pros reporting falls, however there have been massive regional variations, Rics stated.

Downward worth strain is especially sturdy in London, the South East and East Anglia, whereas Northern Eire, Scotland and the North West of England are nonetheless reporting firmer worth tendencies, in keeping with the report.

Wanting forward, surveyors have grow to be extra cautious about home costs within the close to time period, however trying additional forward to the subsequent 12 months a web steadiness of 33 per cent of pros expect costs to edge greater.

<img src="https://static.independent.co.uk/2026/03/02/07/b31d60874ee5b565d502e86a98cedd08Y29udGVudHNlYXJjaGFwaSwxNzcyNTIyODA0-2.24335202.jpg" srcset="https://static.independent.co.uk/2026/03/02/07/b31d60874ee5b565d502e86a98cedd08Y29udGVudHNlYXJjaGFwaSwxNzcyNTIyODA0-2.24335202.jpg?quality=75&width=320&auto=webp 320w, https://static.independent.co.uk/2026/03/02/07/b31d60874ee5b565d502e86a98cedd08Y29udGVudHNlYXJjaGFwaSwxNzcyNTIyODA0-2.24335202.jpg?quality=75&width=640&auto=webp 640w" loading="lazy" alt="Some average mortgage rates on the market have also flown past the 5 per cent mark as lenders have scrambled to make changes" class="sc-1mc30lb-0 ggpMaE"/> Some common mortgage charges in the marketplace have additionally flown previous the 5 per cent mark as lenders have scrambled to make modifications (Anthony Devlin/PA) However in London, expectations for home costs within the subsequent 12 months have “cooled sharply”, the report discovered.

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On the availability aspect, new directions remained broadly secure in February, indicating little quick shift within the pipeline of latest inventory.

Within the lettings market, tenant demand was broadly secure over the three months to February, however landlord directions have been “firmly unfavourable”, pointing to a scarcity of rental houses. Professionals expect rents to rise total within the subsequent three months, the report discovered.

Mortgage lenders have been withdrawing offers and growing their charges as swap charges have elevated, with considerations about rising costs mounting amid the battle within the Center East.

Monetary data web site Moneyfactscompare.co.uk stated on Wednesday that current days have been among the most turbulent within the UK mortgage market for the reason that aftermath of the September 2022 mini-budget.

Some common mortgage charges in the marketplace have additionally flown previous the 5 per cent mark as lenders have scrambled to make modifications.

Rics head of market analysis and analytics, Tarrant Parsons, stated: “February’s survey highlights renewed volatility out there.

“Whereas exercise indicators at the beginning of the 12 months prompt a tentative enchancment, the deterioration within the geopolitical backdrop has clearly weighed on confidence.

“The current rise in oil and power costs has additionally elevated the probability that mortgage charges will stay greater for longer.

“Because of this, near-term expectations have softened. Though the 12-month outlook stays optimistic total, sustaining that trajectory will depend upon the current spike in inflationary pressures easing within the months forward.”