UK house prices increased at the fastest rate in almost 18 months in March, although surging mortgage rates amid the Iran war are likely to lead to a market slowdown, according to Nationwide.<\/p>\n
The UK\u2019s biggest building society said the price of a typical UK home increased by 0.9% month on month in March, the largest increase since December 2024.<\/p>\n
The increase, which compares with a 0.3% rise recorded in February and is ahead of economists\u2019 expectations of 0.6% growth, means the average price of a UK home now stands at \u00a3277,186. Annual house price growth picked up to 2.2% in March, from 1% in February.<\/p>\n
However, Nationwide warned that the US-Israel war on Iran had \u201cclouded the outlook\u201d, with financial markets expecting the Bank of England\u2019s monetary policy committee to raise the base rate three times over the next 12 months from 3.75%<\/a>. Prior to the start of the conflict in the Middle East, analysts were expecting two rate cuts this year.<\/p>\n \u201cThis shift has resulted in a sharp rise in longer-term interest rates [swap rates] that underpin fixed-rate mortgage pricing,\u201d said Robert Gardner, the chief economist at Nationwide. \u201cWith consumer sentiment also likely to be dented by the uncertain outlook and the prospect of rising energy costs, housing market activity is likely to soften.\u201d<\/p>\n